It's the Budget, Flee for Your Life!

Last week the government handed down its inaugural budget.  I understand if it works they might make it a yearly event.  The budget process goes something like this; the government collects together information on how much money it expects to get in revenue and how much what it is currently doing is expected to cost.  They then attempt to bring these two figures to something approximating equivalency while at the same time adding in those things they want to do and making up for it by removing stuff that they really don't want.  With any luck the end result won't actually drive the country into bankruptcy by the end of next week.  Once prepared the budget is then sent to the Senate where it is beaten to death with clubs.  To add an element of suspense to the entire process the information that the government relies on when making its decisions is a) out of date, b) inaccurate and c) liable to change without warning due to circumstances largely beyond the governments control.  It is on this process that governments build their reputation as sound financial managers, or whatever.

Traditionally the first budget of a newly minted government is a tough one.  Governments are in power for three year stretches.  The second budget is used to correct the mistakes of the first one and the third is used for insane spending in a desperate and transparent attempt to get reelected.  Therefore the first budget is really the only one that a government can use to place the country on a sound fiscal basis.

So has the government gone into a frenzy of slashing?  Hacking at programs, cutting services and introducing new taxes as it presides over a grim financial wasteland of Dickensian deprivation and poverty?  Well, not really.  It has done some slashing, there is a little bit of the obligatory reduction of welfare and "making the lazy bastards get a job" sort of thing.  There are also a couple of new taxes cunningly disguised as levies so that we don't realise they're taxes.  This fooled three people who don't actually live in the country.  Business leaders and economists were cautiously pleased while pointing out that the government could have gone much further and they weren't impressed with the levy on high income earners.  People on the other end of the political spectrum are fully in agreement that this is a "vicious" budget that will drive the population to desperation, cannibalism and having to get a job.  These people are expecting a knock on the door any day now as representatives of the government come to harvest their first born.

As a sidebar I have no problem with trying to force the unemployed to get a job but it would be nice to see a little more effort put into making sure there's jobs for them to get.  If every dole bludger, welfare cheat and disability rorter turned up at the job centre tomorrow eager for work all the government could do is give an embarrassed smile and write them a cheque.

I tried to pay attention during the budget speech I really did but I have to admit I zoned out shortly after the bit where the speaker says, "I call the treasurer".  As near as I can tell the carbon and mining taxes are going to be abolished (good).  There will be a couple of new taxes which won't affect me (very good) and a number of government bodies are going to be abolished (we have over nine hundred of these so we can surely spare a few).  The retirement age will be raised to seventy, there will be tougher requirements for young people to get the dole and the discontinuation of funding for various education and health measures beyond that already provided for.  Plus the extra taxes (sorry, levies) will go to pay for a medical research fund and roads.  There's also going to be a heap of spending on infrastructure if we can find the money.  There's probably a bit more to it than that but that's all I could learn by osmosis while dozing in front of the television.

According to the opposition this budget is the worst since Herod introduced a baby tax of 100%.  The poorest parts of society are going to be hardest hit and will be worst off.  Well yes, this is probably true.  For starters "poorest" pretty much already guarantees you're the worst off so even the slightest government cut isn't going to improve matters.  That's what "poorest" means.  However it is claimed that the various cuts are going to fall disproportionately on the poor.  This is also probably true.  For a start its where governments spend most of the money.  It is also a sad fact that there is very little point in taxing the rich.  The rich are much better at keeping their money than the government is at taking it, that's one of the reasons why they're rich.

Another thing exercising the minds of the populace is the eighty billion dollars that is apparently going to be ripped out of health and education funding.  This is basically a lie.  If we ripped eighty billion out of health and education funding we wouldn't have much of either.  What the government has said is that it will not fund the eighty billion dollars of increases the previous government promised for the future in the unlikely event that we would have the money by that stage.  This has provoked howls of outrage from anybody silly enough to believe that the money would ever be forthcoming.

Essentially this budget has done what most "tough" budgets are intended to do in difficult times.  It has shaved a bit off government expenditure to show willing while waiting for things to get better on their own.  If they do the government will take the credit.  This is only fair as they will certainly get the blame if things get worse.  Speaking personally the budget is a bit of a godsend for me as it removes any pressure I might have felt to plan for my retirement.  My retirement package is going to be about six feet long and made out of pine.