Budget hits those in need hard without paying down debt

DID the Budget discriminate against young families? Sure it did. Did the Budget discriminate against stay at home mums? Sure it did.

Did the Budget discriminate against aged pensioners? Sure it did.

Is the Budget focused on paying down debt? Absolutely not.

Almost every grab it made saw proceeds being sent towards a new fangled fund or lofty commitment.

The Medicare co-payment is off to a medical research fund.

The fuel excise grab is off to "infrastructure" which the Abbot government seems to think exclusively means roads, not rail for instance in cities choked with commuter traffic.

To be as kind as I can be, it looks likely the need for future government borrowings to support the bogeyman "middle class welfare" system will reduce. But at what risk?

The increase in Medicare levy (to 2% previously announced to fund the National Disability Scheme), the token and ineffectual debt levy which will lift the tax rate for just 400,000 taxpayers earning more than $180,000 per year to 51%, the gutting of the Family Tax Benefits system, the changed indexation arrangements for aged pensions, the Medicare co-payment, the increase in fringe benefits tax and the tightening of exemptions for health workers and so on will suck liquidity out of the economy.

I'm absolutely sure that Glenn Stevens at the Reserve Bank will be looking on very nervously wondering what monetary policy triggers he'll have to pull to avoid the recession the Abbott government's latest fiscal assault threatens to bring on after 23 years of economic growth.

Growth which has seen people commit to hefty mortgages, child minding costs, school fees, good food, nice clothes, late model cars and so forth - a comfortable "middle class" way of life the envy of every emerging economy.

Take the flow-on effect of the fuel excise increase.

It will affect the cost of goods and services throughout the country, not just by its likely 3% per annum increase but by the added GST which will tag along for the journey.

This counter-productive increase in light of the government's failure to rein in the fuel tax credits scheme which pumps nearly $2.5 billion in taxpayer subsidy to the big mining corporations.

Take the Medicare co-payment.

It will clog up emergency departments in public hospitals throughout the land, which the states are responsible for funding.

They don't have the financial capacity to meet the tsunami the Abbott government will have unleashed and they'll do all the gnashing of teeth in support of an increase in the GST, taking the heat off the Feds.

To quote the Australian Taxpayers Association: "It will take an unprecedented act of political salesmanship to sell this (Budget) as a vote winning package."

Enter that nong Warren Truss who said it is widespread for aged pensioners to spend their superannuation savings on cruises then apply for the aged pension.

Now that's salesmanship given there are two million aged pensioners who vote.

Bob Lamont is director of Corporate Accountants situated at the Night Owl centre. He can be contacted on boblamont1947@gmail.com.



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