Federal Budget 2018 editorial: This one’s for the battlers and the future

SCOTT Morrison who delivered the budget speech last night made it quite clear who the Turnbull government has first in mind. Not the well off (though they will benefit too, down the track) but hardworking Aussies in danger of being swayed by Bill Shorten’s appeals to class warfare.

FOR the average swells of the chattering classes, an extra $1060 a year might seem like spare change.

But for the average Sydney couple whose members each earn less than $90,000 a year, it’s the sort of cash that could mean a new washing machine or dishwasher, a long-delayed car repair finally being taken care of, or even the chance to just take a much-needed break.

In delivering his budget speech last night, Scott Morrison made it quite clear who the Turnbull government has first in mind.

Not the well off (though they will benefit too, down the track) but hardworking Australians in danger of being swayed by Bill Shorten’s appeals to class warfare.

The key element of the Government’s plan is tax relief. And without a doubt this has been made possible by an ­unexpected turn of good fortune in the form of rising commodities prices and an expanding workforce which has given the government the confidence to offer short-term benefits for low wage earners, longer term structural reform, and continued targeting of the deficit.

Treasurer Scott Morrison and Minister for Finance Senator Mathias Cormann with the Budget. Picture Kym Smith

Those on incomes of under $90,000 a year will, assuming Parliament and the Senate agrees, see money on the table next year not in the form of reduced pay-as-you-go tax burdens but annual tax offsets.

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Almost all Australians will benefit down the track through a simplified tax structure that eliminates the 37 per cent tax rate, fights bracket creep, and ­pushes 21 per cent of taxpayers into the bottom tax rate by 2024-25.

Had the Government done nothing to address this, a quarter of those taxpayers would have slid into the next highest tax rate simply by default.

This is a clever move that draws a bright line between the government and Bill Shorten’s Opposition.

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Opposition Leader Bill Shorten reacts as he listens to Scott Morrison’s Budget speech. Picture: AAP Image/Lukas Coch

And because it is structured to parry the usual “milkshake and a sandwich” cynicism that normally attends such tax cuts, it also dares Bill Shorten to oppose legislation that will deliver for battling families as soon as they file their tax returns in 2019.

These are not the only reforms on the table. Moves to make it easier for workers to reconnect with their savings, limiting fees and insur­ance charges, banning exit fees, and raising the allowable numbers of members of a self-managed super fund from four to six all appear aimed at encouraging Australians to take more control of their retirement future. Attacks on the so-called “black economy” will see a further push towards a digital future with cash payments of $10,000 or more banned.

The Budget. Picture: AAP Image/Lukas Coch

Meanwhile, NSW will benefit not from huge grants for major infrastructure but from a $1 billion congestion-busting program.

It’s a departure from previous commonwealth spends that have seen money go either to safety initiatives (think black spot programs) or massive spends on specific road and rail projects.

This is a gift to the Berejiklian government heading into an election of its own against a Labor ­opposition sure to put quality of life issues front and centre.

All in all, Morrison didn’t wind up either as Santa or the Grinch. ­Instead, he delivered a measured budget that included genuine surprises (despite the huge number of leaks in the past fortnight).

If passed, it will also being a long overdue shot of structural reform to the Australian economy. But for an awful lot of working Australian families, he has delivered Christmas in July. Next year.

Originally published as Federal Budget 2018 editorial: This one’s for the battlers and the future