Monday, 11 May 2015

Budget 2015: devil is in the detail but it's all rather blurry

Extract from The Guardian 

The Coalition has carefully orchestrated budget discussion around how politically fair and restorative it is – just don’t get too close



Can’t see the wood for the trees from the Coalition’s carefully constructed vantage point.
Can’t see the wood for the trees from the Coalition’s carefully constructed vantage point. Photograph: Graham Turner for the Guardian

It’s easy to miss the big picture if you look at things close up. It’s easy to miss the detail if you stand too far away. This year the government is carefully positioning the public debate in the middle distance from its second budget, just the right vantage point to see how politically restorative and fair it all is.
The vantage point is close enough that we might miss some of the big questions, like the gaping difference between what this budget does and the case the government made until a few months ago for changes to bring the budget back to balance over time. Or, God forbid, the case it made a few years ago that deficits less than half the size of those it will bring down on Tuesday constituted a “budget emergency”.
It is close enough to miss the logical implications of some of its immediate political lines, like that one about Labor’s modest plan to limit the huge tax loopholes available to the very rich through superannuation tax concessions. If any change to a $30bn-a-year tax loophole, which delivers more than 40% of its benefits to the top 10% of households, constitutes an unconscionable “sledgehammer” to retirement savings – as the government says – it’s hard to see what the Coalition would do to raise tax revenue. But if it doesn’t do anything on the revenue side of the budget, the savings needed pretty quickly move back into the “unfairness” territory traversed by its 2014 budget effort.


But the debate is also sufficiently distant from the fine print to blur some of the detail. The enthusiastically adopted pre-budget theme of how hopeless/invisible/under threat Joe Hockey is compared with the astute/omnipresent/rising star of Scott Morrison is not entirely inaccurate. Hockey did do a lousy job of explaining budget 2014 and Morrison is doing a good job of explaining his pre-announced policies this year.
But the government has also completely changed the nature of the policies it is advocating. Explaining and winning support for progressive policies on aged care or super-generous policies on childcare is not an enormously difficult task. And if this budget is poorly received, it won’t only be Hockey’s job on the line. In the meantime, as we debate whether Hockey is, or is not, in any way similar to Greg Bird, actual policy details are being announced.
One of those details is whether the government will actually see the $1bn it says will be saved by ending “double-dipping” on paid parental leave. Even if we put to one side the difference between Tony Abbott’s “signature policy”, which offered women up to $75,000 in maternity leave pay, and this new plan, which says the government won’t pay anything to women whose employers already pay them the publicly funded rate of $11,5000, this policy is unlikely to work.
As the head of the Australian Chamber of Commerce and Industry told Guardian Australia, employers are likely to offer their top-up payments to employees in other ways, so they continue to be additional to the $11,500 available from the government. Which obviously leaves a question mark over the savings, as well as uncertainty for the new parents.
Another detail is whether the new generous childcare payments are going to happen or not. Originally the government said they depended on the passage of savings from tax benefit cuts, held up from last year’s budget. On Monday the prime minister said they might depend on other, as yet unidentified, savings. Given that the government has ruled out the alternative savings nominated by Labor, and these payments are the one of the budget’s central giveaways, it would be good to know.
The Coalition would prefer we stayed focused on the comfortable middle distance view – that this is a fairer budget than last year with a better chance of passing the Senate. This will probably prove to be true. It would prefer we drew the conclusion that this means Abbott’s government is back on track. That will depend on both the big picture and the pesky details.

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