Budget fairness goes up in (cigar) smoke

Extract from ABC The Drum 

By Mungo MacCallum

Posted 3 hours 30 minutes ago

 

This whole triumphalist Budget is built around the proposition that there is a sucker born every minute. Didn't the Coalition prove that last September? Mungo MacCallum writes.

For many, the enduring image of the 2014 Budget will be the memory of Treasurer Joe Hockey and Finance Minister Mathias Cormann sucking smugly on their cigars as they relaxed before unleashing their brutal Budget on the fearful populace.
But a still more potent symbol can be found in the education budget. The puffing pair cut some $30 billion worth of funding out of the money committed to schools, trashing the visionary and egalitarian Gonski reforms in the process. But they were able to find a quarter of a billion extra for chaplains - chaplains from established religions, that is, none of that secular subversion.
Sack the teachers, send in the missionaries. Pie in the sky when you die. Captain Catholic rules, OK?
This perverse priority should perhaps have been expected in Tony Abbott's first serious move as Prime Minister, an agenda that appears to be based more on spite, revenge and raw ideology than on any serious economic or social program.
To start with, the cruel hoax of the budget emergency was finally put to rest with massive new spending on business tax cuts, roads, medical research and, of course, on Abbott's much derided paid parental leave scheme.
The Australian - hardly the Government's harshest critic - estimates the overall spending for 2013-2014, a fiscal year in which the Coalition has been at the helm for nine of the 12 months, at around $410 billion - an increase of nearly $50 billion over the previous, supposedly profligate, year of Julia Gillard and Kevin Rudd. And why not? Revenue collected by Tony ("our taxes will always be lower") Abbott will rise from 23 to nearly 25 per cent of GDP.
But now, of course, they are cutting back - we are all doing the heavy lifting for the sake of our children. It's just some of us are doing more of it than others.
Business, for instance, gets a tax cut of 1.5 per cent - even big business, which will pay for some (but by no means all) of the PPL scheme will break even. And the richest 3 per cent will be asked to weather a very small, very temporary tax hike that they will easily absorb through their multifarious untaxed lurks - superannuation concessions, dividend imputation, negative gearing and family trusts, to only scratch the surface.
The politicians - sharing the burden - will have their lavish pay packets frozen for just 12 months while those long since retired to wallow in their accumulated loot will have a tad shaved off their gold pass entitlements. But while some are to be briefly lashed with a feather, others are to be stretched on an ever-tightening rack for the foreseeable future.
Petrol excise will rise twice yearly; the pension will fall further and further behind average wages. Health care and education will become more expensive, welfare will be harder to get and there will be less of it and the states are to be forced to raise new regressive taxes of their own.
These changes are not just for a couple of years but forever. And the carnage will take place against a background of cuts to Aboriginal grants, the environment, the ABC and foreign aid.
But don't worry, there's some good news too. There will be more roads - well, in the cities at least - and extra medical research. And of all the lies in the this mendacious Budget, these are perhaps the most cynical: the new taxes are being sold on the fantastic premise that somehow their proceeds will be returned to those who pay them.
Thus the $7 charge for seeing a previously bulk-billing GP will be spent - well, at least some of it - on setting up the super-dooper Medical Research Foundation, so it is actually for the benefit of the sick. As if the hope of an eventual cure for Alzheimer's will somehow console the desperate mother scrabbling for the cash to get treatment for her sick child.
In fact, of course, the money is going, as all taxes do, straight into consolidated revenue, and will have to be re-appropriated before it can be spent anywhere.
And the motive for the tax is partly to raise money, but even more importantly to begin the demolition of universal health care, a system attacked by Abbott last week as "socialised medicine" - the pejorative epithet coined by the Tories 40 years ago to oppose Gough Whitlam's introduction of Medibank. Medical research is an afterthought, a pacifier for the supposedly gullible victims.
And even sillier is the pretence that all the money raised by re-indexing fuel excise (for all but the miners, farmers and truckies, of course, who will continue to get theirs subsidised by the rest of us) will be spent on building highways for the motorists who buy the petrol.
For starters, most of the money is coming from allocations already made, a lot of them by the previous government, and from contributions by the states - to that extent it's just another con.
But consider: do punters seriously expect gambling taxes to be spent on bigger and better casinos and racetracks? Does even the most sozzled drinker believe that alcohol taxes go to building pubs, breweries and distilleries and to subsidising the production of hops and barley? Do smokers fantasise that the taxes on their fags will end up in the hands of tobacco farmers, or even the specialists who attend to their inevitable health problems?
A tax (or for that matter a levy, a duty, a tithe or a tariff) is raised to be used by the government as it sees fit, and anyone who supposes otherwise is a candidate for the first scammer who comes by with an offer of a lease on the Sydney Harbour Bridge. But that is hardly to worry Abbott, Hockey and Cormann as they peddle their nauseating snake oil around the country.
After all, this whole triumphalist Budget is built around the proposition that there is a sucker born every minute. Didn't they prove that last September?

Mungo Wentworth MacCallum is a political journalist and commentator. View his full profile here.