There’ll be plenty of post-budget spin around in the next few days, so just a few minor observations:
- In a neat exercise in bait-and-switch, the increases in family tax benefits that were “leaked” on Monday turn out to be pretty small. I don’t think that’s a bad thingÂ – as I argued this morning, expanding churn is simply inefficient.
- Some of the investment in the budget (roads, VET, Indigenous health) seems pretty reasonable. It might have been better, however, if the cash had been directed at spurring reform. I don’t get the impression that this is the case, but I haven’t pored over the fine print.
- The tax cuts are more regressive than I’d expected, worth ten times as much for the richest 1% as for a middle-income earner. Put these tax cuts together with last year’s budget, and it may be that the tax changes in Australia have been as regressive as the Bush tax cuts of 2001.
- Because most journalists think $80,000 is a middle-income wage, stand by to hear these mis-described again as tax cuts for the middle and the top.
- WillÂ theÂ budget will cause the RBA to push up rates? Costello’s argument is that continued surpluses make it unlikely. On the other hand,Â when Keynes wrote about expansionary fiscal policy, I think $9 billion a year in tax cuts is the kind of thing he had in mind.
Update: Andrew Norton reminds us that hisÂ eminently sensible proposal to raise the loans cap on FEE-HELP was adopted in the budget. Nice to see bloggers making policy.
Further update: Bruce Chapman in the Age has more to say about how the budget will affect universities. The headline is suprisingly inapt.