Daily Telegraph Editorial: This Budget is a challenge to the Opposition

Forget the issuing of the writs. This year’s federal election kicked off on Tuesday with a strong message from the Government and a challenge to the Opposition: Will Bill Shorten match the support for small business, women, and the broader economy.

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Forget the issuing of the writs. This year’s federal election kicked off on Tuesday night with a strong message from the Government and a challenge to the Opposition: We, the Coalition, are on the side of effort, we support Australians taking charge of their own destinies, and — although we never spoke his name on the night — we challenge Bill Shorten to match us in our support for small business, women, and the broader economy.

Largely off the back of higher than expected iron ore prices, the Treasurer was able to announce a larger than expected surplus of $7.1 billion. This, said Frydenberg, would be followed by a further $45 billion worth of surpluses over the next four years — the unstated threat being “but only if the Coalition is allowed to remain in power”.

And, happily, some of that extra money will flow into taxpayer pockets through the bringing forward of tax relief for Australians earning up of $126,000 a year as well as a promised further $158 billion in tax relief — though structural relief of bracket creep will have to wait .

Promises to cut the 32.5 per cent tax rate to 30 per cent and widen its scope to cover income from $45,001 to $200,000 per year — that is, an estimated 70 per cent of taxpayers, or around 11.2 million voters — won’t kick in until 2024-25.

The Budget offers an unspoken challenge to Bill Shorten. Picture: Tracey Nearmy

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Here it seemed odd that, despite the claims to support individual effort, the Treasurer also boasted that someone earning $200,000 will pay 10 times as much tax as someone on $45,000. This was underlined by documents released by his office showing that Australians pay one of the highest top tax rates in the OECD.

But if pay-as-you-earn taxpayers will continue to shoulder much of the burden of keeping the Government going, at least small business is in for some relief. It is this sector in particular that is a target for the Government, which is clearly hoping to exploit the ALP’s preference for an economy dominated by big unions and big businesses who can, unlike smaller enterprises, absorb the cost of Labor’s proposed regulations and mooted “living wage”.

While the Treasurer announced little in the way of new measures beyond an increase of the instant asset write-off from $25,000 to $30,000, its expanded availability to businesses with up to $50 million dramatically widens the scope of enterprises that will be eligible — many of them substantial operations with a number of employees. The Government is to be congratulated for this initiative, which echoes John Howard’s legacy of bringing small business owners and tradies firmly into the Liberal fold.

Additionally, the Government has used this Budget to make a strong pitch for female voters and attempt to its neutralise critics on the subject.

Treasurer Josh Frydenberg with his son Blake before his first Budget speech. Picture: Gary Ramage

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The Government announced $328 million over the coming years to help prevent domestic and family violence and provide support for its victims, as well as a “Future Female Entrepreneurs Program” and further funding to encourage women and girls to study STEM subjects.

But as a campaign document, the Treasurer’s Budget speech was also telling for what it left out. While national security is traditionally the Coalition’s home turf, Frydenberg made no mention of this topic — despite the Budget providing for an additional $571.4 million over five years for ASIO and the AFP.

Nor was there much mention of energy beyond Energy Assistance Payments for pensioners — revealing one of the Government’s key weak spots in its inability to articulate a clear strategy to keep the lights on even as it has been presented with a multitude of targets in Labor’s own deeply confused energy policy. A measure to spend a paltry $8.4 million on opening up gas reserves in the Northern Territory is nice, but ignores the failure to access natural gas on the east coast where it is urgently needed.

That said, the Treasurer is to be applauded for bringing in a surplus and a Budget that will challenge Labor’s fiscal responsibility.

In other words, it’s your move, Mr Shorten.