Tuesday, May 12, 2009

Budget Tonight

Yep - the big one... probably the toughest budget an Australian Treasurer has had to put together for quite a while.

Lots of talk about cutting back on middle-class welfare, and good on them I say. Its almost sickening to see the entitlement attitude in middle Australia. People expect handouts for everything. And the apparently conservative Howard Government was king and splashing cash around. The baby bonus - not means tested - was ridiculous. It achieved not social equity outcomes, and I don't believe anyone would swing their decision to have a child over 5 grand - so arguably, no population outcomes either.

The Government needs to cut and cut hard into middle class welfare schemes - and means testing as far as I can see, is the most fair and equitable way. A lot of journalists have written about how difficult the sell will be on this budget, given that they want to stimulate the economy, but at the same time are cutting back on other schemes.

I think the best approach for Wayne Swan is to try and clearly delineate in people's minds, what are temporary stimulation measures, and what are ongoing costs. Thus, he can argue that temporary stimulii (woohoo... I got to use the word stimulii!!!) are about seeing Australia through this economic downturn - but the cutbacks to ongoing schemes are about returning the budget to surplus as soon as possible.

The Howard Government have a lot to answer for in terms of building in ongoing costs into the fiscal cycle - everything based on the assumption that the good times would go on forever (and short-term political gain). Conservatives often criticise welfare because it creates dependance on the government. Maybe its time to look at 'middle' Australia and their outstretched hands for government 'assistance'. Its time to wean Australia off its entitlement attitude - this will server us well both fiscally and socially.