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Beyond the spin, beyond the handouts, here’s how to get a handle on what’s really happening on budget night

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/peter-martin-682709">Peter Martin</a>, <em><a href="https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292">Crawford School of Public Policy, Australian National University</a></em></p> <p>Three weeks from now, some of us will be presented with a <a href="https://budget.gov.au/">mountain</a> of budget papers, and just about all of us will get to hear about them on radio, TV or news websites on budget night.</p> <p>The quickest way to find out what the budget is really doing will be to listen to the treasurer’s speech, or to peruse online the aptly-named “<a href="https://treasury.infoservices.com.au/page/budget2023">glossy</a>” – a document that last year was titled “<a href="https://archive.budget.gov.au/2023-24/overview/download/budget_overview.pdf">Stronger foundations for a better future</a>”.</p> <figure class="align-right zoomable"><a href="https://images.theconversation.com/files/589444/original/file-20240422-23-vkinrm.png?ixlib=rb-4.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/589444/original/file-20240422-23-vkinrm.png?ixlib=rb-4.1.0&q=45&auto=format&w=237&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/589444/original/file-20240422-23-vkinrm.png?ixlib=rb-4.1.0&q=45&auto=format&w=600&h=848&fit=crop&dpr=1 600w, https://images.theconversation.com/files/589444/original/file-20240422-23-vkinrm.png?ixlib=rb-4.1.0&q=30&auto=format&w=600&h=848&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/589444/original/file-20240422-23-vkinrm.png?ixlib=rb-4.1.0&q=15&auto=format&w=600&h=848&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/589444/original/file-20240422-23-vkinrm.png?ixlib=rb-4.1.0&q=45&auto=format&w=754&h=1066&fit=crop&dpr=1 754w, https://images.theconversation.com/files/589444/original/file-20240422-23-vkinrm.png?ixlib=rb-4.1.0&q=30&auto=format&w=754&h=1066&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/589444/original/file-20240422-23-vkinrm.png?ixlib=rb-4.1.0&q=15&auto=format&w=754&h=1066&fit=crop&dpr=3 2262w" alt="Cover of 2023 budget glossy" /></a><figcaption><span class="caption">Glossies are used to make each budget attractive.</span> <span class="attribution"><a class="source" href="https://archive.budget.gov.au/2023-24/overview/download/budget_overview.pdf">Commonwealth Treasury</a></span></figcaption></figure> <p>But they will tell you exactly what the government wants you to hear, exactly as it wants you to hear it.</p> <p>If you are looking instead for the truth – what the government is actually trying to achieve and what it is holding itself and its officials to, I would suggest something else, tucked away on about page <a href="https://cdn.theconversation.com/static_files/files/3225/8787.pdf">87</a> of the main budget document.</p> <p>It is required by the <a href="https://www.legislation.gov.au/C2004A05333/latest/text">Charter of Budget Honesty Act</a> introduced in 1998 by Peter Costello, the treasurer under Prime Minister John Howard.</p> <p>On taking office in 1996, Costello set up a <a href="https://webarchive.nla.gov.au/awa/20101119021633/http://www.finance.gov.au/archive/archive-of-publications/ncoa/execsum.htm">National Commission of Audit</a> to examine the finances he had inherited from the Hawke and Keating governments, presumably with an eye to discovering they had been mismanaged.</p> <p>But the members of the commission weren’t much interested in that. Instead, they decided to deal with something more fundamental.</p> <h2>Budget as you wish, but explain your strategy</h2> <p>Governments were perfectly entitled to manage money in whatever way they wanted, and they were perfectly entitled to spend more money than they raised (which they usually do, it’s called a <a href="https://www.investopedia.com/terms/d/deficit.asp">budget deficit</a>).</p> <p>What the commission wanted was for governments to make clear what they were doing, and to spell out the strategy behind it.</p> <p>Only part of it was about being upfront with the public. The commission also wanted governments to be upfront with themselves – to actually develop frameworks for what they were doing, rather than doing whatever they felt like.</p> <p>The commission recommended a <a href="https://webarchive.nla.gov.au/awa/20101119021633/http://www.finance.gov.au/archive/archive-of-publications/ncoa/execsum.htm">Charter of Budget Honesty</a>, which among other things requires officials to prepare independent assessments of the finances before each election, requires budget updates six months after each budget, and requires <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook45p/TaxExpenditures">tax expenditures</a> (tax breaks) to be accounted for like other expenditures.</p> <p>And it requires the publication and regular updating of a <a href="https://cdn.theconversation.com/static_files/files/3227/CBH_Fiscal_strategy.pdf">fiscal strategy statement</a>.</p> <h2>Where treasurers hold themselves accountable</h2> <p>The <a href="https://cdn.theconversation.com/static_files/files/3225/8787.pdf">fiscal strategy</a> can be thought of as an exam question set by the student who is being examined – something along the lines of “this is what you say you want your budget to achieve, please set out the means by which you plan to achieve it”.</p> <p>It turns out to have been exceptionally effective in getting governments to organise their thoughts, make budgets at least try to achieve something, and let the rest of us know what they are trying to achieve.</p> <p>Every few years, treasurers change the strategy, as is their right. Treasurer Jim Chalmers says he’ll change it again this budget, to de-emphasise the fight against inflation and to more greatly emphasise the need to <a href="https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/transcripts/press-conference-washington-dc-0">support economic growth</a>.</p> <p>His statement will tell us what’s behind his actions in a way the glossy words in his brochure and speech might not.</p> <h2>The strategy that has signposted 26 years</h2> <p>Previous statements have signposted all the important turns in what the budget is trying to do.</p> <p>The first, in <a href="https://images.theconversation.com/files/589686/original/file-20240423-16-rncqg3.PNG">1998</a>, committed Costello and Howard to achieving a budget surplus on average over the economic cycle and whenever “growth prospects remain sound”.</p> <p>Making that commitment more difficult was another “not to introduce new taxes or raise existing taxes over the term of this parliament”.</p> <p>Two years later, after the government had won an election promising a new goods and services tax, that commitment was <a href="https://images.theconversation.com/files/589692/original/file-20240423-18-q843xn.PNG">changed</a> to “no increase in the overall tax burden from its 1996-97 level”, a condition met by calling the GST a state tax.</p> <h2>Hockey and Morrison wound back spending</h2> <p>The Labor budgets from 2008 <a href="https://images.theconversation.com/files/589702/original/file-20240423-18-mikx6f.PNG">loosened</a> the tax target to the <em>average</em> share of GDP below the reference year, which they changed to the higher-tax year of 2007-08.</p> <p>The first Coalition budget under Treasurer Joe Hockey in 2014 changed the target from tax to spending, pledging to bring down the ratio of <a href="https://images.theconversation.com/files/589705/original/file-20240423-16-9spkdy.PNG">payments to GDP</a>, and pledging a surplus of 1% of GDP by 2023-24.</p> <p>Any new spending would be more than offset by cuts elsewhere, and if the budget did receive a burst of unexpected revenue it would be “banked” rather than spent.</p> <p>In 2018 Treasurer Scott Morrison reintroduced tax as a target, that he spelled out precisely. Tax was not to increase beyond <a href="https://images.theconversation.com/files/589706/original/file-20240423-16-b7gj5d.PNG">23.9%</a> of GDP.</p> <h2>During COVID, Frydenberg spent big</h2> <p>In 2020, in the face of a COVID-induced recession and soaring unemployment, Finance Minister Mathias Cormann and Treasurer Josh Frydenberg pushed the old strategy to one side.</p> <p>They would spend big now to keep the economy afloat so they wouldn’t have to spend more bailing it out later, and they wouldn’t return to their old concern about the deficit until the unemployment rate was “<a href="https://cdn.theconversation.com/static_files/files/3228/fs2020.pdf">comfortably below 6%</a>”.</p> <p>So well did they succeed that in 2021 Frydenberg made the momentous decision to keep going, abandoning the promise to return to worrying about the deficit when unemployment fell below 6%.</p> <p>Instead he promised to keep spending big until unemployment was “<a href="https://images.theconversation.com/files/589709/original/file-20240423-16-9pmpaf.PNG">back to pre-crisis levels or lower</a>”.</p> <p>The decision propelled unemployment down to a 50-year low of <a href="https://www.datawrapper.de/_/wPfXO/">3.5%</a>.</p> <p>Along with high iron ore prices, that one change of strategy has probably helped deliver Chalmers two consecutive budget surpluses – the one he announced last year for 2022-23, and the one he is set to announce this year for 2023-24. More of us have been in jobs <a href="https://www.finance.gov.au/publications/commonwealth-monthly-financial-statements/2024/mfs-january">paying tax</a>, and fewer have been out of jobs <a href="https://theconversation.com/half-a-million-more-australians-on-welfare-not-unless-you-double-count-227342">on benefits</a>.</p> <p>It’s a powerful demonstration of the real-world difference budget decisions can make, and the way in which the <a href="https://cdn.theconversation.com/static_files/files/3225/8787.pdf">fiscal strategy</a> tells the story.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/228387/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/peter-martin-682709">Peter Martin</a>, Visiting Fellow, <a href="https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292">Crawford School of Public Policy, Australian National University</a></em></p> <p><em>Image credits: Getty Images</em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/beyond-the-spin-beyond-the-handouts-heres-how-to-get-a-handle-on-whats-really-happening-on-budget-night-228387">original article</a>.</em></p> </div>

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Cash handout: Thousands of Aussies urged to check eligibility for $500 boost

<p>Tens of thousands of Australians may not be aware they are eligible for an extra $500 from the federal government.<br /><br /><span>The new plan offers handouts for aged and disability pensioners, veterans, people on carer payments and family tax benefit recipients as part of the 2020-21 budget.</span><br /><br /><span>Commonwealth Seniors Health Card (CSHC) and pensioner concession cardholders will also be eligible for the cash.</span><br /><br /><span>Recipients will receive a $250 cash boost in December and another $250 in March 2021.</span><br /><br /><span>National Seniors Australia has urged self-funded retirees to check their eligibility too.</span><br /><br /><span>The group believe thousands of older Australians who are self-funded retirees may go without the cash boost, as they may be under the impression they don’t qualify for the CSHC.</span><br /><br /><span>Changes to deeming rates used as part of the CSHC income test has improved eligibility for the card.</span><br /><br /><span>This means there is also improved eligibility for budget stimulus payments.</span><br /><br /><span>To qualify for the CSHC, an individual must have reached the pension age, meet an income test, not be receiving any payments from Veterans Affairs and be an Australian resident living in the country.</span><br /><br /><span>To meet the income test, individuals or couples must earn below the following thresholds:</span></p> <ul> <li><span><span>$55,808 for singles</span></span></li> <li><span><span>$89,290 for couples</span></span></li> <li><span><span>$111,616 for couples who are separated by illness, respite care or prison.</span></span><span><span></span></span></li> </ul> <p><span><span>“Self-funded retirees who are among the hardest hit by the COVID Financial Crisis (CFC) could really do with some extra cash in their pockets going into Christmas,” National Seniors Chief Advocate Ian Henschke said.</span><br /><br /><span>Australians have until November 27 to be eligible and receive the first $250 payment.</span><br /><br /><span>Those eligible are strongly advised to make sure their details are up to date on MyGov before the payments start flowing through.</span></span></p>

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Holden axed: Scott Morrison slams US parent company after $2 billion handout

<p>Prime Minister Scott Morrison has slammed General Motors’ decision to axe the Holden brand, accusing the US car giant of wasting billions of dollars in taxpayer money while allowing the iconic Australian marque to “wither away”.</p> <p>Holden’s closure was announced on Monday, less than three years after GM ceased the brand’s production in Australia.</p> <p>Speaking at a Melbourne press conference, GM International Operations senior vice president Julian Blissett said it was “an agonising decision for us and one we didn’t make lightly or easily”.</p> <p>“With the global consolidation of the automotive industry, it’s becoming increasingly challenging for us to support a brand and a business that operates in just two markets,” he said.</p> <p>“In short, GM desperately wanted a successful and sustainable Holden in both Australia and New Zealand.</p> <p>“We implemented a number of alternative strategies but ultimately GM has taken the decision it’s unable to prioritise the significant investment required for Holden to be competitive and profitable long term.”</p> <p>Holden interim chairman and managing director, Kristian Aquilina said the company had “chased down every conceivable option” to prevent the axing of the brand.</p> <p>“We have had multiple rounds of discussions and tried to find a way to defy gravity,” he said.</p> <p>“But the truth and the hard truth was there’s just no way to come up with a plan that would support a competitive and growing and flourishing Holden and also provide a sufficient return to our investors.”</p> <blockquote class="twitter-tweet"> <p dir="ltr">GM will continue to support existing Holden customers, including honouring all warranties and extended serving commitments, spare parts and servicing. A full statement with Q&amp;As can be found here. <a href="https://t.co/nF9k6jxkAd">https://t.co/nF9k6jxkAd</a> 2/2</p> — Holden (@holden_aus) <a href="https://twitter.com/holden_aus/status/1229241911426179072?ref_src=twsrc%5Etfw">February 17, 2020</a></blockquote> <p>The federal government vowed to hold Holden accountable over its promise to support 600 workers and hundreds of dealers and suppliers affected by the company’s plan to retire the brand by 2021.</p> <p>Speaking at a press conference on Monday, Morrison said he was “disappointed but not surprised”.</p> <p>“I am angry, like I think many Australians would be,” he said.</p> <p>“Australian taxpayers put millions into this multinational company. They let the brand just wither away on their watch. Now they are leaving it behind.</p> <p>“I think that’s very disappointing, that, over many years, more than $2 billion was directly provided to General Motors for the Holden operations.</p> <p>“I think the fact they took money from Australian taxpayers for all those years just to let the Holden brand wither on their watch, I think is disappointing.”</p> <p>In 2013, Holden revealed it had received <a href="https://www.abc.net.au/news/2013-04-02/holden-reveals-billions-in-subsidies/4604558">$2.17 billion in taxpayer-funded subsidies</a> over 12 years.</p> <p>The company said it would continue to honour all existing warranties and guarantees as well as provide servicing and spare parts for at least 10 years.</p> <p>There are currently 185 Holden dealerships across Australia.</p>

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