When a conquering army suffers a reverse and must retreat from a battlefield they usually sow land mines to impede an advancing opponent. This Federal budget is designed to cement in place two events that will definitely find favour with the public - but leave the task of financing them to someone else.
The two big ticket items - Gonski and the NDIS - constitute the bulk of Labor's $ 78 billion spending spree. The " savings " promised in this budget fall far short at just $ 43 billion. It would be unrealistic to think that the incumbent government seriously expects to win the September 14 election. They are hoping to reap the glory of biting the bullet on education reform and care for the disabled, but leaving their successor with the unpleasant task of making unpopular decisions to foot the bill.
This was a very timid " horror " budget to plug a fast widening financial gap. The carbon tax and mining tax shortfalls are producing a $ 13.8 billion budget deficit. Most voters accept that Medicare levy increase and the sharp contraction in the baby bonus will not send people to the barricades, but slapping an extra 7 cents a packet tax rise on cigarettes was just the usual increase in " sin " taxes - and alcohol was spared this time around.
Closing loopholes on business taxes was preferred to any sort of general tax increases that directly affect voter's wallets and yet we see clear evidence of more price rises in the pipeline for basic items like gas and a weakening Australian dollar will push up the cost of imports. Dropping interest rates will help make mortgages more affordable, but such savings will most likely be directed into advancing mortgage reductions rather than a retail spending spree. The Treasurer predicts a small upward blip in unemployment numbers.
One glaring anomaly is taking money from universities to prop up Gonski reforms. Not a lot of joy in making primary kids smarter if it sacrifices school leavers by creating a disconnect between gaining higher education to fill the skill shortage.
The " elephant in the room " that rated barely a mention in the budget speech is the ballooning cost of processing asylum seekers. This is soaking up $ 2.9 billion - and there is no end in sight. It seems that the Treasurer has raised the white flag of surrender - and walked away from the problem.
Fixing this mess is going to land on someone else's plate. That is going to involve some hard decisions and probably a degree of compromise. It will probably involved extending the full implementation of Gonski and the NDIS to a longer time frame and high cost items such as the installation of broadband modified to deliver what we can afford.
It seems to be a budget from a government preparing for a defeat they expect to happen !
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