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How Australia’s budget is designed to win votes ahead of federal election

The Budget’s eye-watering ‘Cash Splash For All’ is designed to fuel Australia’s booming economy, but the decision to shut us off from the world is to secure the Coalition another easy election win, writes CHARLIE MOORE

  • Treasurer Josh Frydenberg has handed down second budget in seven months 
  • Many existing schemes have been extended such as instant asset write-off 
  • New policies include child care changes to benefit 250,000 families by $2,200 
  • Many commentators say this budget is designed to win the next election  

Barista Szilvia at work at Madisons cafe on the Gold Coast

When the coronavirus pandemic hit Australia in March 2020, about 900,000 Aussies lost their jobs as restaurants, pubs, and shops were shut down to stop the deadly disease from rapidly spreading throughout the nation.

Centrelink queues all over the country snaked around the block as the economy was plunged into recession for the first time since the early 1990s.

The shock forced the government to unleash an unprecedented wave of spending including doubling the JobSeeker payment and introducing the $89billion JobKeeper wage subsidy – the most expensive policy in Australian history.

The October budget backed up these large-scale programs by bringing forward permanent tax cuts for low and middle income earners, and outlining a range of initiatives to get Aussies back to work such as JobTrainer, HomeBuilder and Boosting Apprenticeships Commencements.

A little more than a year since the virus reached Australian shores, the situation could hardly be more different.

Businesses have bounced back as the country enjoys relatively normal life with the virus confined to quarantine hotels – and 74,000 more Australians have jobs than before the pandemic hit.

Consumer sentiment is currently at its highest level in 11 years, the property market is booming and the stock exchange reached an all-time high this week.

So the role of this budget is starkly different from the last.

Its aim is to consolidate Australia’s gains, keep the economy firing and keep voters happy in the lead-up to an election which is tipped for late this year. 

No doubt keeping the borders closed until 2022 is a ploy to please cautious voters who are worried about catching Covid-19 and potential lockdowns. 

Aussies don’t seem to mind being shut off from the rest of the world when they have the money to do up their house, perhaps buy a new car and take that holiday in the middle of nowhere they always planned – but previously it was just too easy to go to Los Angeles. 

Businesses have bounced back as the country enjoys relatively normal life. Pictured: A tradie in Sydney

Businesses have bounced back as the country enjoys relatively normal life. Pictured: A tradie in Sydney

To cement Australia’s recovery, Treasurer Josh Frydenberg has simply extended many of the schemes in the last budget that have worked as he intended.

The low and middle income tax offset will be used again to give 10 million Aussies another boost of up to $1,080 in their tax returns next year.

The JobTrainer program will provide a further 163,000 free training places in areas of skills need.

The instant asset write-off is also extended, allowing companies to write-off the full value of any asset such as utes, tractors and machinery.

And the loss carry-back scheme will be pushed out until June 2023, allowing companies to offset previously taxed profits as far back as the 2018-19 income year.

In that sense Mr Fydenberg’s second pandemic budget is a continuity budget, with the spending taps slightly turned down to reduce next year’s deficit from $161 billion this year to a still-large $106 billion.

There are some significant new initiatives such as reduced childcare costs for 250,000 families and hugely increased funding for aged care, and some tinkering of superannuation.

And there’s a glossy new pamphlet touting policies that benefit women to fix the government’s ‘women problem’ following the poor handling of Brittany Higgins’ rape allegation (further evidence this is an election budget).

But for the most part we’ve seen this budget’s policies before, and that’s no bad thing.

Last year the Labor Opposition said the government would be tested on whether it can get the unemployment rate down and get Australians back to work.

The October budget helped achieved that and this one builds on earlier success.

Treasurer Josh Frydenberg delivers the budget in the House of Representatives on May 11, 2021 in Canberra

Treasurer Josh Frydenberg delivers the budget in the House of Representatives on May 11, 2021 in Canberra

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