Tag: Scott Morrison

Photo:(ABC News: Matt Roberts) Scott Morrison's third budget will be described in many ways in the next few weeks. But the best way of describing what it is, and what drives it, is as a reflection of the transformation of Australian politics since the Coalition returned to power in 2013. And gone is the hangover of the global financial crisis in the budget's figures. This is a budget that is almost wholly and solely about tax — or more accurately, tax cuts. No-one sees it as a budget of profound tax reform. Mr Morrison was making lots of noise on Tuesday night about returning the budget to surplus and about how net debt is peaking in 2017-18. But any substantive improvements are still a long way away, in some cases close to a decade away. After that, it falls away over the next three years. But there is no great ambition attached to this — just the impact of the economy on reducing proportional spending. And it leaves room for the Government to make further decisions between now and the election if Labor seeks to outplay it in terms of election promises.

"That means bigger taxes on middle Australians, year after year. "It's not a magic number, or some sort of fundamental law. It seems more like politics than economics." The remarks by Professor Holden, a strong supporter of the Coalition's corporate tax cuts, have been echoed by other economists after the government vowed to formalise the tax-to-GDP cap as a new core fiscal rule in Tuesday's budget. "So if Labor wants to increase the overall tax burden in the economy at a cost to growth and jobs then they would have to formally change the fiscal strategy settings." "There are two sides to the budget – revenue and spending – and imposing a speed limit on one but not the other is fraught with risk," he warned. "Twenty-three-point-nine per cent of GDP is a decent tax speed limit in its own right – a worthy objective – but it's above the long-term average tax take. "It was almost plucked out of thin air. Who says the average during the Howard years is the optimal figure? "There was meant to be a rule that any windfall gains be applied to reducing debt and deficits, and clearly that's not going to happen this time."