Underwhelming federal budget contains ‘hollow logs’ full of promise

It was never going to be a showstopper.

Those who expected a raft of announcements – whether sweeteners or structural reforms – were always going to be disappointed.

This is, after all, the federal budget the Government would have preferred not to have, and would have avoided delivering, barring Cyclone Alfred pushing back the election into May.

Other than a ‘business as usual, everything’s under control, nothing to see here’ pitch, all the main action has already started, with the Government making Medicare, PBS, energy rebates, housing and infrastructure and school funding announcements in recent weeks.

The cut in the bottom marginal income tax rate was the only real surprise handed down on Budget Night this year.

As is common practice with government budgeting these days – and that applies to all governments, in all jurisdictions and of all persuasions – hollow logs are stuffed full of cash to accommodate election promises and spending.

The federal budget includes over $13 billion of allowance for spending on ‘decisions taken but not yet announced’ over the budget period.

In other words, up to $13 billion in election promises can be announced without impacting the budget’s bottom line. They’re already baked in.

This does not preclude a government, or opposition, from announcing election commitments exceeding this total.

But if they do, they will need to find offsetting spending cuts or revenue increases, or run the risk of being accused of undermining the budget position and the nation’s economic health.

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This article was originally published on LinkedIn:

https://www.linkedin.com/pulse/underwhelming-federal-budget-contains-hollow-logs-full-87xoc/