Budget 2009

[wycbloods]

What are peoples thoughts on the budget that was passed down tonight?

Is the record debt a real concern or is the spending required to lessen the impact of the recession we are in?

[Squawk]

Middle class welfare may have been targetted but the govt has been very careful to try and avoid grossly alienating the middle class voters who won it the last election.

Would have preferred it if the cash splash was used to assist small business.

The measures introduced also do little to encourage ambition - the more you succeed, the more you get penalised. Household earnings between $100k - $200k or so are really hit by the new means testing processes introduced in the budget and pre-budget. If you earn more than that, you should have capacity to absorb this. Otherwise, you have been slugged big time, especially if you are generation X.

The two big issues that haven't been addressed is user-pays health care. If you earn enough, your taxes pay for public health cfare and then you have to also pay for your own private health cover. Will we expect that this will translate to education - the more you earn, you will have to send your kids to a private school? Secondly, self-funded retirees have have their income smashed by reduced share values and low interest rates, and along with the unemployed and single parents, they have all been overlooked. I know Swan said single parents have had other benefits in recent years, but with unemployment expected to rise to 8.5%, I reckon they are holding off on a rise for this group until the next budget.

A good component was that $10 in the aged pension increase was preserved for pensioners in aged care - in other words, you can expect that aged care homes will increase their fees to ensure they still get 90-95% (or whatever the figure is) of the pension.

Assuming we don't have a double-dissolution election, the next budget will be critical to the election that will follow.

On a local level, forecast GST distribution to SA is something to watch - our budget in SA is virtually sorted out by now as Foley has announced he is flying to New York to brief Standard and Poors re our credit rating, before he hands it down. This is our pre-election budget and you can be certain that the GFC will be blamed.

Ironically, at a Federal level the criticism of the previous Liberal Govt is that they squandered the rivers of gold from the resources boom. However, at the same time they were criticised for building too big a surplus as under the Federation, the Commonwealth is expected to return significant surplus money to the states and territories. At a state level, it is the opposite. The Labor govt says it hasn't had any rivers of gold despite being in govt during the same resources boom! It was gifted an economic windfall from the sale of the Power companies that was used to wipe out 80% of the State Bank Debt, yet despite achieving a AAA credit rating it has been unable (or unwilling) to build anything other than a miniscule surplus. Suddenly hard times hit and whereas the current Cwlth govt inherited a nice surplus, there is nothing in savings for the state govt to spend and now we are heading towards a massive deficit of our own.

[Psyber]

Pensioner couples were treated poorly - they only need $10 while single pensioners need $30 ???

Traditional Labor policy and dogma emerging, and a very familiar looking budget.
We have rapidly rising debt now, and ahead we have rising interest rates, rising business costs and personal costs, and loss of motivation to build business, earn more, employ workers.
"Stagflation", and the "J-curve", await us - I'd guess late 2010, or early 2011.

I am resuming working, but I'll keep the hours down as there is no point earning a taxable income over $70K.
I'll rent a serviced room rather than employ anyone and have to do all the extra paper work.
Battening down time...

I, too, would have thought it made more sense to support and encourage small business and its motivator, personal wealth growth.
That would have encouraged employment growth.

[once_were_warriors]

I'm pretty neutral on the budget, I have no children yet and my wife and I are on good money. We don't recieve any additional money from the government and we don't expect to, there are a lot more people that need the assistance.

The only thing that annoys me is the private health. I don't care about the rebate as if you want private health then thats your decision. Its the additional 1% medicare surcharge that they would flog me and my wife if we both didn't have private health. Its telling me thanks for the 1.5% you contribute already but your not welcome to use the public system.

Apart from that my theory is if you worry about what others get and not get then you waste valueable time of your life on something you have no influence in changing.

[wycbloods]

Psyber do you think the 50% tax concession for small businesses assets is a good move to assist small business. I agree there are some things the government could have done more to stimulate small business and enhanced there ability to employ people.

[Gozu]

Apart from that my theory is if you worry about what others get and not get then you waste valueable time of your life on something you have no influence in changing.

Well said, it would seem the Howard government really did create a strong 'entitlement' attitude in a lot of people with their middle-class welfare policies.

[Psyber]

Psyber do you think the 50% tax concession for small businesses assets is a good move to assist small business. I agree there are some things the government could have done more to stimulate small business and enhanced there ability to employ people.

Probably, as it will assist in updating equipment, and thus help that small business and those that supply the equipment.
A lot of small businesses I have seen run on some pretty poor phones and computers because they can't afford the capital outlay, so there may be efficiency gains.
But I haven't read the detail.

Mind you when I was in Melbourne working in the outer eastern suburbs I had to involve Senator Coonan to get a broadband service at all.
A grant wouldn't have helped there so long as Telstra got away with insisting none of their lines would carry ADSL and they couldn't connect two cable services to one building.
[Outcome: the building got ADSL, I got free access as thanks for the achievement from the landlords, and Telstra got told to stick the unreliable and expensive cable service that had been being used there for 4 years...]

[Psyber]

Latest news on federal government financial management:

http://au.news.yahoo.com/a/-/latest/557 ... allowance/

Taxpayers are paying for daily accommodation expenses of up to $215 claimed by politicians who are staying at their own residence, News Limited reports.

http://au.news.yahoo.com/a/-/mp/5578674 ... lack-hole/

Just a week after the Federal Budget, Reserve Bank of Australia (RBA) estimates suggest the numbers do not add up.
By the RBA's calculations, the Budget could be out by $11 billion.

http://au.news.yahoo.com/a/-/latest/557 ... g-assault/

Unions are also worried about the scheme.

The national secretary of the Australian Workers Union, Paul Howes, says a large number of his members have been in share schemes for many years and have that as a core component of their conditions of employment. "I've been receiving a number of phone calls, from both employers and members alike, who are extremely concerned about what impact this will have on their employment packages with their companies," he said. While he says many members earn more than $60,000, he would not consider them high income earners. "I don't think you would call steelworkers earning $80,000 or $90,000 a year the top end of town," he said.

Rod Masson from the Finance Sector Union says there is widespread concern among his unions members, many of whom earn above the threshold.
But he says they could hardly be considered high-flying executives, and believes the Government could make changes that would better target the scheme. "We think the $60,000 figure is completely arbitrary, and we are at a loss to understand where it's been drawn from," he said. "There has to be a better benchmark. We would think that benchmark should be at the top marginal tax rate level of about $180,000.
That would make far more sense to us.

[Territory Thunder]

Rudd is feeling the pinch and apparently has a few trips around the land in the next few weeks planned