The Good Stuff Before the Budget Stuff
Even the most hardened political animals can get stroppy with the deluge of Budget commentary, so, before I give you my bite-sized chunks of the most interesting things I came across over the past few weeks, I give you this piece of public policy optimism.
Yesterday, 10 May, the Federal Government announced that it would move to introduce an Australian Modern Slavery Act.
The move to tackle the global scourge that is slavery is one that had Business Council chief executive, Jennifer Westacott cheering.
“Increased global trade has lifted millions out of poverty and delivered higher standards of living to all Australians, but it has also increased the risk that supply chains have been tainted by the use of forced labour.
“Modern slavery is abhorrent and business stands ready to work with the government towards ending the practice. We are committed to identifying forced labour and weeding it out of tainted supply chains.
“The government has taken a sensible approach, harnessing transparency to drive better practice and reveal which companies are working to maintain clean supply chains.
“We also commend the government for leading by example and extending the same reporting requirements to the federal government’s public procurement.”
Same Old Fertiliser, Different Day
Remember when the Federal coffers were overflowing during the mining boom and, rather than put that money away for the inevitable howling economic storm or invest in projects that would deliver generational benefits to the economy and our pretty entitled way of life (like functional high speed internet, or an interconnected, direct and affordable public transport system, or public housing and preventative health measures…) the then PM, John Howard, and Treasurer, Peter Costello, threw away years of solid fiscal management by cutting taxes?
Well, a larger-than-anticipated windfall from income taxes predominantly, and a jump in company tax receipts, supported by population-growth-fuelled employment strength, has led our esteemed purse string holders to once again loosen the strings.
Bearing in mind that back in the old days of the mid-2000s, a tax cut meant you paid less tax than you had in previous years. Today, the use of the term has changed to generally meaning you will be taxed less than was originally planned, but still more than before in real terms. That short-term boost to your end of year return is really just that, short-term.
Scott Morrison has moved to cap the federal tax take at 23.9 per cent of GDP (gross domestic product).
On the surface, there are similarities here to the Fair Go Rate Cap in Victoria, that caps rate increases for local councils at 2.5 per cent, in line with the Consumer Price Index.
The local government rate cap flattens future rate hikes and spreads the rate burden proportionally across the local government area, so that properties with increasing values might attract a higher rates bill, while properties with smaller increases or decreases in value might see their rates bill reduced.
The point the Treasurer is making with the cap is that we need to live within our means. It’s an admirable sentiment.
But what happens with the economy picks up? The good times, and they will return, would see wages and company profits rise and the taxes flood into the federal coffers. Would a sensible and fiscally responsible government slash taxes to meet the 23.9 per cent cap in times of already high inflation? Again, I mean?
Do We Really Care?
No. Well, not many of us anyway, according to an April 24 Essential Report on the most important Federal Government issues. Income tax cuts came 10th and business tax cuts came 13th on a list of what voters consider the most important issues they would like the Federal Government to be addressing.
What topped the list? Cost of living, followed by improving our health system, and addressing job creation and reducing unemployment.
Are our voices in Canberra listening? With an election looming, you can bet Malcolm Turnbull’s Apple Watch and Bill Shorten’s ‘nation of ideas’ quotes list (hint, it’s long) they are listening. But announcing tax cuts is what the two majors do in the run up to an election, even if it’s not what the voting public is crying out for …
Was Geelong Ignored In The Federal Budget?
Oh, the outrage! But wait, there is not one but two elections coming our way in 2018/19. While the Andrews Government in Victoria produced a very solid list of pre-election budget sweeteners for our fair city by the bay, there was almost crickets from Canberra.
But isn’t Corangamite (perhaps soon to be the seat of Cox – and anyone who thinks it is crass or juvenile to laugh at that one just doesn’t know humour even when it is waggling around and swinging a … well, you get the idea) teetering on a knife-edge after the boundary redistribution?
Why yes, yes it is.
And is it likely that the Turnbull Government will allow that seat to just slip away without some very pointed incentives to vote sitting Member Sarah Henderson MP back in?
I think we will find that Geelong has not been forgotten, but rather that the PM is holding fire so that his pre-election arsenal for the seat isn’t overlooked in the broader Budget news.
Just wait for it.
But don’t take my word for it
Adam Murray, Partner - Business Advisory, at Crowe Horwath in Geelong had this to say on what local businesses can take away from Budget night:
"Overall, this was a reasonably safe Budget without any major changes. The government did announce a number of infrastructure projects that will benefit Geelong, and should result in the creation of more local jobs. These include a contribution towards duplication of the rail line to Waurn Ponds, assistance towards upgrading Avalon Airport for international flights and upgrading Australian Animal Health Laboratory, which is Australia’s national biocontainment laboratory.
“However, the biggest likely impact on the Geelong region will be the additional funding pledged towards the health sector, which is one of the largest and fastest growing industries in the area. This includes an increase in aged care packages and significant funding committed towards medical research.
Overall the budget can be seen as positive for the Geelong region."
Our public transport woes are finally starting to attract some dollars-backed attention, albeit with the lack of clear planning.
Melbourne will get a rail link to Tullamarine Airport and a $50 million State Budget allowance to detailed planning (you can make your own calls on that) for high-speed rail between Geelong and Melbourne – that would also connect with the Melbourne Airport rail line.
Will it connect with Avalon Airport?
Will it stop at Wyndham Vale and become stalled at the North Melbourne interchange?
Will it save more than 6 minutes off the travel time?
Will it ever actually be built?
And if yes, will it comfortably provide enough capacity to not jam us in like sardines over the peak?
Will North Korea get fast rail into China between we get fast rail into Melbourne?