Petty savings

For all the tough talk before the Budget, the cuts announced on Tuesday night were small scale and posed no risk to Wayne Swan taking the title ‘ Australia’s highest taxing and spending Treasurer’, which has traditionally gone with the job. As Tim Colebatch says in The Age this morning:

IF LABOR made no policy decisions this year and put the budget on automatic pilot, federal spending next year would have been $287,828 million. Instead, after months of work by the razor gang, federal spending estimates have been cut to $287,764 million.

Spot the difference? In net terms, Labor cut federal spending by 0.02%. Its net cuts totalled $64 million — $1 for every $4500 the Government spends.

As Treasury’s historical data shows, there have been eight budgets since the fall of the Whitlam government with lower increases in real spending, four of them under Labor.

Though I am pleased that the FTB B and the baby bonus are to be means tested, this is more a symbolic change than a big saving, with only $173 million less spending in 2008-09 as a result. Those two programs between them will still increase their spending by $707 million, of the nearly $2 billion in total increases to official family payments. The Education Tax Refund, which is effectively an extension of FTB A, adds another billion.
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