Scott Morrison’s third federal budget, with a focus on personal tax reform over the next 7 years, hardly delivers genuine tax reform. In the lead-up to next year’s federal election, the main focus of this budget is obviously political.
This budget confirmed expectations that it would return Australia’s finances to a small surplus in 2019-2020, a year earlier than had previously been planned following almost 10 years of deficits. This improvement in finances should be seen as positive news for PM Malcolm Turnbull following on from a series of political setbacks in recent times.
Most of the budget announcements, including;
- Immediate tax cuts for low and middle-income households
- $75 billion infrastructure plan for rail and road projects
- $2.5 billion in public technology infrastructure, and
- $1.6 billion in residential aged care
Will be widely viewed as “sweeteners” in the lead up to next year’s election.
In what can be seen as being clearly a pre-election budget, the main problem for the government will doubtless be it’s capacity to navigate through the Senate, particularly for those measures not waved through by the Opposition. There will likely be further pre-election promises on the part of the Government requiring funding which may, in turn, somewhat erode the projected return to budget surplus.
Time will tell whether these budget changes will result in any real long-term sustainable economic prosperity for Australia.