inamerrata

Every time I’ve heard the budget mentioned over the past week or so, it’s prefaced by the words “big spending”, but I’m lost as to how that could actually be the case — it’s in surplus, and taxes are to be reduced a bit, so doesn’t that mean any other possible budget would be a bigger spending budget? Or is an “average” budget meant to include huge tax cuts while maintaining a surplus, and thus everything else is comparatively wasteful?

Or is it just that most of the people writing news stories about the budget don’t have anything useful to say, so they have to resort to a Pavlovian response of adding “big-spending” whenever an election is nigh to fill in time?

My take? It’s a boring budget — tax rates greater than 30% are getting less and less relevant, along the lines of the John Humphrey’s Reform 30/30 proposal, though in bite size-pieces. Education is getting a few more market-driven policies with some more full fee courses and some more incentive-based pay for teachers and schools that do well, though that’s more of a nudge than anything.

The higher education endowment fund could be pretty impressive, I guess; though I’m a bit lost as to how it should be seen as an “investment”, or, at the very least, how you’d even guess at an appropriate value to put on the expected return (which I’m assuming is expected to be collected through increased tax revenue coming from a higher GDP), so as to compare it against other possible investments of the Future Fund. Seems like a much more sensible thing for the government to be investing in than broadband, at least. That’s assuming you look at it from the perspective of that money having been “expected” to go to government superannuation entitlements, and thus “taken” from the Future Fund, rather than an expansion of the Future Fund to address other political goals, which I guess is the view that Costello holds, and at least according to one report does so with some justification.

Actually, I guess it’s not that hard to expect that to be a major success: it’s relying on universities to spend it sensibly, which seems a safe bet, and as an endowment fund should provide about $300 million to be invested every year forever, along with encouragement for significant private support simply by making the government funds available as matching, tax-deductible contributions, or similar.

There’s apparently a significant increase in military spending with no particular strategic change I can see, some pretty straightforward nods to the environment, and a bunch of stuff to help families that followed the child-rearing advice of “one for the mother, one for the father, and one for the country” from earlier budgets.