What does the budget mean politically?

THERE’S a reason Malcolm Turnbull’s generous Budget is full of goodies, and it all has to do with the next election.

THIS year’s Budget is bound to be music to the ears of tens of thousands of Australians, but is it all just part of a cynical ploy to win votes?

The Prime Minister told the Today show this morning there would an election in the first half of next year.

When asked if he would run full term and lead the Coalition to the next election and beyond, Mr Turnbull replied “absolutely”.

“But what this is doing is delivering for Australian families,” he said.

“It’s ensuring that they benefit from the strong economic growth that our national economic plan has been able to deliver. That’s our commitment.”

Let’s look at some of the key announcements ...

TAX CUTS

The Turnbull Budget strategy is pretty much the same as the Turnbull re-election strategy: Give them money and they will vote for you. And it is very much a case of Malcolm in the middle, with 4.4 million voters on $48,000 to $90,000 offered a tax break of $530 a year. It might be basic pork-barrelling, but everybody likes bacon.

TAX REFORM

When Malcolm Turnbull took over the prime ministership he was more popular than God, then he stunningly burned up all his political capital by embarking on a mission for tax reform that simply never happened. Now it’s back on the books with a massive overhaul of income tax rates that will see every worker earning between $41,000 and $200,000 — virtually all but the very poor and the very rich — on the same rate. Did someone say flat tax?!?!?

GOLDEN OLDIES

A good Budget usually has something for the mums and something for the kids but this one also has something for the grans. With retirees fed up to pussy’s bow with both sides of politics tinkering with super, the government has gone after the blue rinse set by opening the pension loans scheme to all older Australians, including those grumpy self-funded retirees, and increasing the pension work bonus threshold. This will also wedge Labor over its contentious franking rebate cash grab.

POWER PRICES

The government reckons that its national energy guarantee, upon which Josh Frydenberg expended more energy than a South Australian wind farm, will reduce power bills by an average $400. This is perfect public policy: The government takes credit for saving households money but the power companies have to pay for it. Sexy stuff.

Power prices could drop in coming years. Picture: iStock

THE CLEVER COUNTRY

The Treasurer has announced a 21st century medical industry plan, which is a plan so good it has been announced twice by two different treasurers and two different prime ministers. Sound familiar? Yes, it’s our old friend the Medical Research Future Fund, which was the shining centrepiece of Joe Hockey’s first Budget. Unfortunately the $20 billion dollar fund was supposed to be funded by the GP co-payment that never happened and so its largest investment is now $500m over 10 years for genomic research.

ROADS AND RAIL

As it has also announced, ahem, more than once, the government is spending a whopping $75 billion on infrastructure, including airport rail links in Sydney and Melbourne and metro projects in Brisbane and Perth. There is also a new $1 billion “Urban Congestion Fund” to bust those bothersome bottlenecks that make voters so mad. And there is $3.5 billion to upgrade regional roads, upon which the federal government can announce its beneficence to every passing motorist on sign after sign after sign. It calls this initiative “Roads of Strategic Importance” and they certainly are!

BACK IN BLACK

But the biggest bonus for Budget pointy heads — and let’s face it, who else is in Canberra? — is that the books are being balanced a year earlier than expected. That means that as of July 1 the government can go to the polls saying we’re going to be in surplus next year — the first in more than a decade. Last year, Malcolm got moral and ploughed money into education and disability and this year the gods have rewarded him with manna from heaven.

Originally published as What does the budget mean politically?