May 10, 2017

Horse 2270 - Budget 2017: The Morrisoning

When the parliament sits with a slightly different set of protocols, which is what happened last night, when you have one speaker who is able to speak uninterrupted, they are then able to sound remarkably sane. When Scott Morrison delivered the introductory speech for the Appropriation Bill No.1 (2017), he did so as one who sounded as though he had proper authority, rather than someone trying in desperation to be heard.
What was also notable about the delivery of the first budget bill was the absence of the Prime Minister Malcolm Turnbull. Instead we had the Deputy Prime Minister Barnaby Joyce sitting behind the Treasure and on the left, and on the right was the Minister for Education Christopher Pyne. Julie Bishop was relegated to the bench immediately behind them and also in shot was Peter Dutton. Depending on your point of view, this would have looked like everything right with this country or everything wrong with this country, in one picture.
A Budget delivery speech is primarily about marketing and the image that the government is trying to project. In that regard, the overall tone of Mr Morrison's speech was one that could have come out of the mouth of practically every Treasurer since federation. This was not an alarmist speech but something which was measured and provided you remove your partisan tinted glasses, actually rather a bit dull and that indeed was the point. This speech was about delivering the message that it is business as usual and one that firmly stepped out of the shadow of former Treasurer Joe Hockey's "budget emergency" speech of a few years ago. There were a few things of note and this is a summary of what stood out to me.

This budget is based on the key assumption that wages are likely to grow at about 2% over the long run. Although a few bones have been thrown the way of targeting tax evasion by large multinational corporations, there isn't really much in the way of increasing revenues via increased taxation except for that which happens naturally. This is mostly a sensible idea as it means that all of the headline rates of income tax remain the same and so for the vast majority of people, no change whatsoever is perfectly acceptable and predictable.
With regards small business, that is businesses with a turnover of less than $10m, the rate of company tax is set to fall slightly and the ability to write off assets which have a capital cost of $20,000 or less, within the tax year, remains. I personally find that having the small business company tax rate as a different rate to the normal rate, annoying. This means that when it comes to dividends which are paid by these businesses to their owners​, that the shortfall between company tax and their marginal rate of income tax widens. If they are both kept in concert at 30%, then back of the envelope calculations are easier and explaining things to small business owners is also easier.

Mr Morrison outlined several funding packages for infrastructure spending which included improvements to the Bruce Highway in Queensland, expressway and road improvements in Western Australia, duplication of the railway line heading into Geelong in Victoria but the biggest ticket item was the announcement of the Melbourne to Brisbane Rail Project at a cost of $8.4bn, which is to be commenced in 2017/18 and completed by 2026/27.
The thing with major rail infrastructure announcements​ is that as a nation we have heard many over the years that have ultimately come to nothing. This one hasn't been floated in an airy fashion but by including it in the budget, there's a chance that it might actually happen. I find it interesting that if you look at the proposed route of the lines, they almost exclusively pass through electorates which are currently held by the National Party or by the LNP in Queensland; that also includes the electorate of New England which just happens to be the seat of the Deputy Prime Minister Barnaby Joyce. Go figure.
There was also an amount which has been allocated for the Western Sydney Airport which is to be built at Badgerys Creek. The cynic in me wants to say that this will be an excuse for the Liberal Party of the year 2031/32 to sell it off again. On that note, Mr Morrison also indicated that he wants the Federal Government to buy the Snowy Mountains Hydro Electric Scheme from the NSW State Government; which also makes me wonder if that will also be sold off by future governments.

There was some nice rhetoric surrounding the Medicare levy with that set to increase and perhaps more importantly, the freeze on the rates paid by the Federal Government to doctors and GPs has also been lifted. I find it a little worrying that a separate fund will be created to administer the Medicare levy because again, I can see such a thing being sold off by future governments.
When it comes to direct welfare payments, the government is still in damage control mode over the issue of automatic debt collection notices and depending on which​ side of the political divide you happen to sit on, the announcement that there is to be enforced drug testing of welfare recipients is either going to make you cheer or make your blood boil. Personally I think that it is prudent that the government would want to see that welfare payments are wisely spent and I hope that there are public and mental health services which are tied to this but equally I can see this being used punitively and a way of chucking people off of welfare and onto the garbage pile.

Lurking in the deep dark dank depths of this budget are increases to the amounts that we're paying to put asylum seekers and refugees into tropical gulags to hopefully rot, snips at the budget for the ABC, further swipes at the budgets for universities, and perhaps most worrying of amounts paid to the Australian Secret Intelligence Service are all labelled "nfp" or "not for publication", due to supposed national security concerns. I find it deeply disturbing that my tax dollars are spent on being deliberately cruel to some of the most vulnerable people in the world, I find it scary that the Liberal Party yields to the demands of its friends in business when it comes to the ABC and the sooner that Michelle Guthrie is removed the better, I find it unbelievably stupid and short sighted that instead of investing in both the labour capital and cultural capital of the country through the vehicle of further education that this government wants to kneecap the very thing which improves future taxation receipts, and I find it insulting that I am not allowed even to know what the number is that we spend on the dark art of spying.

I will of course need to spend several days looking into the minutiae of the budget because being such a hefty tome, it is often the picture painted by ten thousand words which is important rather than just the snapshots. On the face of it though, this is a mostly dull budget and deliberately so by design. If this budget had been presented by Anthony Albanese, then The Australian and the Daily Telegraph would have cried that it is death incarnate but as it has been presented by Treasurer Scott Morrison, then it will be given glowing reviews in today's newspapers. But it's still mostly dull.

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