Topics: Budget 2024-25;
8:45AM ACST
15 May 2024
David Bevan: Good morning, Simon Birmingham.
Simon Birmingham: Good morning. Good to be with you.
David Bevan: Well, look, people are going to welcome the tax cuts. It’s money in their pocket. They’re going to welcome $300 over the course of a year. How are you going to argue against that?
Simon Birmingham: Well David, the tax changes the Labor Government has brought in are changes. They were a shuffle, and they only did that because the previous Coalition government had already legislated for income tax relief, which we did through three stages. Ultimately, though, the failing and I think Australians will see through this in this budget is that it doesn’t do anything to tackle the core problem of inflation. Which is hurting people not just in their electricity bills, but in their gas bills, in their supermarket bills, when their insurance premium lands in the letterbox, in their council rates. In every part of their lives Australians are feeling the pain when it comes to inflation. And we’ve now got a situation where the Reserve Bank sees inflation as being a home-grown problem, as the Reserve Bank Governor has described it, and the Reserve Bank has higher inflation forecasts than the government has handed down. There is a real test on the credibility of this budget, which you look at many of the economic commentators over the course of the period since last night. They think it has failed that test in terms of poking the inflationary bear. They think it will do that, and it will make the Reserve Bank’s job harder. And that, of course, makes life harder for all Australian households.
Jules Schiller: So, Simon Birmingham. Do you think that the surplus should have been higher? We should have taken more money out of the economy, cut more services.
Simon Birmingham: Jules, this is a government that has been rolling in extra windfall dividends. There is some extra $360 billion of tax revenue that has come through the four years of budget projections that they inherited from the previous government. Company tax, up $176 billion, income tax up around $150 billion. So that’s much, much more revenue that this government is taking in. And those tax receipts are far greater than the improvements in the budget bottom line, because it’s a government that is spending. And don’t just take my word for it to Phil Coorey, who I know you speak to on air quite often, long standing and respected Financial Review journalist. You know his words today – it’s a spending addiction that fuels a new decade of deficits.
David Bevan: Simon Birmingham, thank you very much.
[END]