Editorial
Budget’s lifting also separates

This is a budget of lifting, as Joe Hockey promised it would be. The pension age will be lifted. The cost of medical visits will be lifted. More than $2.5 billion will be lifted from the emissions reduction fund. A similar amount lifted from industry bodies and programs, including the CSIRO. Money will be lifted out of health and education and disabilities programs. About 16,500 jobs lifted from the public service.

There is, as with any budget, some good and some bad. But what is most striking is that this is a budget that offers a brief discomfort for the very rich, and sustained punishment for the not rich at all. It is the young who will suffer and the elderly poor. The former face rising youth unemployment and now an arbitrary barrier to support; the latter face pensions that are further away and access to heavily subsidised healthcare that is less likely. Pensions will also be linked to inflation rather than wages growth.

Some of this would make sense if the tax concessions on superannuation were slashed heavily, although they were not. At the upper end, those in the top tax bracket will pay an extra $7 or so in tax a week. A deficit levy will be imposed on those making more than $180,000 a year, although this is only temporary.

For the young and poor and old, the changes this budget brings are structural. For others, they are passing.

Hockey created a budget emergency and deficit fetish into which he launched this budget. In the chaos of emergency, and with a tabloid press telling the very people worst affected by this budget that they had been saved, much has been forgotten. Fairness, among other things.

Here we lift heavily, as Hockey encouraged us to. This time, from Ross Gittins: “I give Joe Hockey’s first budgetary exam a distinction on management of the macro economy, a credit on micro-economic reform and a fail on fairness. Although Hockey has laboured hard to ensure few sections of the community escape unscathed, the truth is most of us have been let off lightly. Only those people right at the bottom of the ladder have been hit hard – unemployed young people, the sick poor and, eventually, aged and disabled pensioners – but who cares about them? We’ve been trained to worry only about ourselves, and to shout and scream over the slightest scratch.”

The $80 billion worth of cuts to health and education over the next decade may be a strategy to force the states into demanding an increase in GST, taking over a responsibility that should really be the government’s. If it is, it is an extraordinarily vicious version of cowardice.

Australia’s revenue is weighted too heavily towards income tax, a looming disaster with an ageing population, and a rebalance of this kind would have been welcomed in the budget. It would also have required political resolve and deep public engagement. Hockey has promised he might take this to the next election. In a budget emergency, it was too difficult to sell.

This article was first published in the print edition of The Saturday Paper on May 17, 2014 as "Budget’s lifting also separates". Subscribe here.

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