Budget 2004

Budgets are about people and choices

Managing the Budget is one of the most important functions of a government. First, the Budget decides how the government gets its money. The main way of raising funds is tax, and the Budget sets the rules on who gets taxed, at what rate, and what for; for example, income tax, sales tax and corporate tax. On the other side of the equation the Budget determines how the government spends; for example, on Pensions, Defence, Roads, Health and Education. How the mix is chosen says a lot about the government's values and it can have a large bearing on the society we live in.

The union movement has condemned this Budget for the choices it makes and importantly the ones it doesn't make.

When it comes to tax, since 1996 almost two thirds of taxpayers--everyone who earns less than $47,000 a year--are paying up to $600 a year more in tax. At the same time, people on incomes over this amount are now paying less tax with people on $80,000 a year getting an effective tax cut of $2000 a year.

With health, Australians are paying more and more while services decline. Since 1996 costs overall are up 30%, and the cost of seeing a GP who does not bulk bill is up by close to 70%. At the same time bulk billing for GP visits has fallen from over 80% to 68%.

Also since 1996, education costs have shot up by 53%, childcare is up 50% and home purchase costs are up 37%.

The big bribe

In this Budget we got a tidal wave of spending, $6 billion in six weeks, $52 billion over 5 years. The big bribes from the government leading up to the election include a $600 family tax payment before June 30, then another $600 in family tax payments when tax returns are filed.

Don't count your chickens though. The simple fact is around one in three families will never see the promised $600 payment because it will be eroded by the family debt repayment.

As well, the government has finally bowed to a concerted union campaign for paid maternity leave. In a scheme that looks remarkably familiar, the government announced a Maternity Payment of $3000 that will be paid to all mothers on the birth of a child from July, rising to $5000 by July 2008.

Tax cuts--for some

The other big-ticket item in the Budget is a tax cut, and it's here where the Government shows its true colours. To get a tax cut you need to earn $1000 per week. This means 4 in 5 taxpayers will miss out. The Treasurer himself gets a tax cut of $42 per week.

While others pay more

Meanwhile, the Federal Government just keeps taxing at higher levels:

o Total Commonwealth taxes are set to hit a record high next year at $217 billion--up 90% since 1996.
o By next year total personal income tax will be up 80% since 1996.
o Australian taxpayers are already paying an average of $9,000 more in Commonwealth taxes than in 1996--this will grow to $12,000 over the next four years.

Health and education miss out

Put simply, in the Budget, for our health there is:

o No plan to adequately fund our public hospitals.
o No plan to save Medicare bulk billing.
o No plan to relieve the 500,000 Australians waiting for dental care.
o No plan to tackle child obesity and encourage children to exercise.
o No plan to address the urgent needs in mental health.

For our education and training there is:

o No plan for early childhood development, including encouraging parents to read to their children.
o No plan to fund our schools--public and private--on the basis of need.
o No plan to provide additional funding for public education.
o No plan to address the shortage of university and TAFE places and areas of skill shortage.
o No plan to keep higher education affordable.
o No plan to help more young Australians move from school to work.

The message is clear: this Federal Government's record is to tax the low-paid more and more while pushing up the costs of essential service like health and education. This Budget fails to turn anything around; instead, it throws around last minute bribes.

It's not enough: it's too little, too late.

June 2004 contents