May 14, 2008

Swan Budget II

Swan is proud as punch, he said so himself.

Preparing the budget, so we've been told a few thousand times, was "tough", meaning: difficult, brain-curdling work.

Guess Swan didn't have to do much thinking on the back benches, so his personal benchmark for hard work is set on the lowish side of a sub-optimal scale. By any reckoning the first ALP budget was a bit of a doddle. No fancy footwork or triple somersaults with a half twist flourish.

I know the inflation boogieman is a bother for everyone, but we tax payers should be at least as anxious about how much of hard earning cash we're handing over to the Feds.

Way back when, the total tax take in Peter Costello's first year as Treasurer was $125 billion, equal to 17.6% of gross domestic product.

In the current year to June, tax receipts will be $286 billion, or 23% of GDP.

In 2008-09, tax will rise to $299 billion, or 24.6% of GDP, and by 2011-12 it is still expected to account for 25% of GDP.

Company tax was $19.7 billion or 15.8% of total tax revenue in 1996-97.

In the current year it will be about $66.5 billion, equal to 23% of GDP and a predicted $73.5 billion and almost 25% of GDP in 2008-09.

The inflation genie has been stashed in a bottle for another day, with tens of billions from this and next financial year being stuffed into yet more future funds. (Swan forgot to thank Costello for that handy-dandy idea.)

The begging question is what the hell we're doing giving the Feds a massive 25% of the pie, yet both the Feds and the States are seemingly doing diddly-squat to improve education, delivery of health services, aged care, pension payments, crucial intergenerational infrastructure (hey, water anyone?) and so on.

Keep the real data in mind next time you hear a pollie insist that we "can't afford" tax cuts.

Respond with an emphatic: "pig's arse".

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