Abbott and Hockey to counter damage from last year with a sweetener-packed statement this year

AFTER last year’s brutal ambush of household expenses the 2015-16 economic statement will have winners who need a hand and losers the Government will argue can afford to be slightly worse off.

GET ready for the “Nice Budget”.

After last year’s brutal ambush of household expenses the 2015-16 economic statement will have winners who need a hand and losers the Government will argue can afford to be slightly worse off.

“I don’t want anyone to say this is an unfair Budget,” said Prime Minister Tony Abbott.

Those winners will include small business, families and aged pensioners. Further, the general economy will not be subjected to slashed spending and smothered wage rises. One of the Budget’s aims is to overcome jitters it helped provoke and boost consumer and investment confidence, and employment.

It is a difficult front to maintain as extra spending in any one area will require cuts elsewhere.

There has been much more consultation on Budget measures than conducted before the statement last year. Last year there was virtually none, and that left flaws in proposals.

Social Services Minister Scott Morrison has discussed ways of lowering the $42 billion aged pension bill with seniors’ groups and such Senate cross bench members as Nick Xenophon and Bob Day. That could increase chances of this Budget passing the Senate, although Mr Morrison has not spoken to the Greens.

(Mr Morrison is playing such a prominent role it also is becoming known as “The ScoMo Budget”.)

One problem for the Government is its continued struggle to live down some of the heavy handed surprises and broken promises which came in May last year. The future of higher education funding, for example, is yet to be resolved.

Mr Morrison has had to officially dump the Government’s proposal to change the system of age pension indexation, effectively cutting the incomes of all pensioners.

Instead it is now targeting about 300,000 part pensioners with significant assets for $2 billion in savings over four years, while assuring 90 per cent of recipients they will be better off or be unaffected.

The GP co-payment of the last Budget has been dropped but the freeze on the Medicare rebate remains and will be passed on by doctors, with AMA forecasts it could reach $8 extra on the cost of a GP visit.

The Government is expected to propose a $5 increase in the cost of processing a prescription at a chemist, while the pharmacist is expected to cut $1 from its own take on the transaction.

But the Nice Budget will have sweeteners. It will boost child care funding in a means tested system which will be good news for households with a combined income of around $165,000 a year.

Small business will get a company tax cut and greater access to tax write-offs for establishment costs. Treasurer Joe Hockey will outline the cost of this but is hoping small business will be better placed to exploit new technologies and create new streams of employment. Figures this week show unemployment now is 6.2 per cent.

Overall there is a hope within the Government the Budget will be well received and will rebuild its political stocks, which dropped so low after the Budget last year Prime Minister Tony Abbott lost significant authority within his own party.

And the Government’s credibility and reputation for competence and fairness also suffered from chasing a “Budget emergency” which didn’t exist.

And if a Nice Budget did deliver Nice Mr Abbott and Nice Mr Hockey, the Prime Minister might be encouraged to test whether the applause could be sustained during an early election campaign.

Originally published as Abbott and Hockey to counter damage from last year with a sweetener-packed statement this year