Breaking Down Australia's Super-Unambitious 2015 Budget

Last year's budget was ideological. It wasn't spurred by ideology, though, so much as it was driven by audacious political ambition. It was a budget by people who wanted to leave their mark. They wanted to rewrite the boundaries of socialism in Australia, and to make ours a land of small government. To prepare us for the widespread cuts to spending this would entail the attendant message was focused on a "budget emergency".

It was a political catastrophe, widely derided as ineffective and unfair. Consumer confidence slumped. The core message was simply not believed. People asked what budget emergency? You might get us to a budget surplus but won't it actually hurt the economy? The fallout from its failure almost saw the PM overthrown. So this year's budget was underpinned by a much smaller ambition. Don't get fired.

The don't-fire-me strategy this government has gone with: be boring. Spend enough to make the right people smile–after all, it might be an election budget–but for the most part keep it dull; put things on autopilot and hope the global economy doesn't fuck us.

Winners

Small businesses. It is a fine morning to be a tradie. On top of the expected 1.5 percent decrease in their tax burden, and a 5 percent tax discount for the unincorporated (sole traders, trusts, etc), from now until just after the next election, businesses with an annual turnover of less than $2 million are given an immediate 100 percent tax deduction of all assets under $20,000. My advice? Become a small businessperson right now – the process for start-ups is going to be streamlined, and their legal expenses deducted – buy yourself a small car, a sweet laptop, and a Segway. Then go back to work for someone else after the next election because that 100% tax exemption expires June 2017.

Parents (who work). $3.5 billion new dollars for the parents of young children who leave their child to put in an honest day's labour. Families earning under $65,000 will get 85% of their childcare fees subsidised (50 percent for families earning over $170,000). The proviso: it all hinges on the government passing last year's welfare cuts. Shift workers and folks in rural areas will get access to a $246 million pilot program to subsidise nannies.

National Security. A $450 million boost. It's unknown how much money the security agencies have asked for and what operational shortfall they're expecting but increasing the "stop terrorism" kitty is always viewed as a political winner – regardless of its effectiveness. So intelligence-gathering agencies will get a $296 million technological boost, the Australian Border Force will get $50 million in training funds, and telecommunications companies will receive $131 million to help them store our private meta-data for lubricated government access (they'll slip in so easily, you won't even notice).

Honourable mentions: Defence, Farmers (particularly those affected by drought), and Northern Territory Infrastructure

Winners? Losers? Depends on how you feel about this glass of water

The Youth of Australia. A $330 million Youth Employment Strategy to help younglings get jobs, particularly those in areas of high youth unemployment, those suffering from mental health issues, and migrants. On the flipside, from January 1 2016, 15 to 21-year-old early school leavers will have to work 25 hours a week to qualify for income support. The six months wait for newly unemployed people to receive welfare has been reduced to one month, however if you miss an appointment with Centrelink you'll have your pay suspended.

Health. The medical research grant is still here, and there will be Medicare rebates for certain procedures. But a billion dollars worth of savings will come from the axing of GP super clinics that haven't yet been been built, and "rationalising and streamlining" (read: axing) some programs. None of the changes have managed to placate the Australian Medical Association, whose director remains upset about the state of the indexation freeze for GP and specialist patient rebates.

Education. Students with disabilities will get $1.3 billion in extra help and total federal funding for primary and secondary schools will go up by $4.1 billion over the next four years. However, given the ideological position of this government, and the manoeuvring of the past year (including the scrapping of future funding arrangements that were worth billions of dollars in revenue to the states), the future is murky – especially for tertiary education.

Honourable Mention: Pensioners

Losers

Foreigners! You fruit-picking backpackers will no longer have it so easy (it was easy, right?). Those coming to Australia on a working holiday no longer have that $18,000 tax-free threshold, and will instead pay 32.5 cents tax in every dollar.

Stay-at-home parents. Get back to work, you shiftless parents. If your family income is over $65,000 a year and you're a stay-at-home dad or mum you will no longer be eligible for childcare assistance. Not sure how likely this is to happen: Labor, independents, and National party members have already flagged their opposition. A policy that is simultaneously offensive to those with old-fashioned family values, and those worried about single parents. A rare budget exacta.

Netflix, Apple, and everybody who purchases stuff online. Just when you were thinking maybe it was time to give up that Internet piracy. As of July 2017 the GST is set to cover app purchases, streaming services, and pretty much anything you can download – including music and games.

Honourable Mentions: People who don't vaccinate their kids (no childcare subsidies for you), Australians living overseas, Multi-national Corporations structured to avoid Australian taxes, Mothers double dipping on maternity leave

The Wrap Up

The budget fails the standards the Coalition promised coming in. It also has many of the issues they accused the previous Labor government of not addressing. But this doesn't mean the government has apologised or to stepped back from their previous emphasis on deficit reduction and budget surpluses, let alone the fear-mongering message of the 2014 budget emergency.

It's the advantage of never having been believed in it in the first place. They have simply to let the snarky reminders wash over them. When asked the "emergency" question in an interview with the ABC last night Treasurer Joe Hockey said, "We laid the foundations at the last budget and we have started to implement it. The plan is well under way."

Long-term economic plans are based on long-term economic projections, which are about as reliable as long-term weather projections. If we don't face any more "headwinds" (the term people have been using to describe global economic factors such as the slowing of China's economy, and the drop in the price of iron-ore), this budget should be fine. Because it's based on fairly optimistic predictions, it doesn't harm the economy – it should even help it a little, and it will get us to a surplus by 2020. Unless things get gusty, in which case ignore the last sentence.

Scaling back from last year's budget should be seen as a good thing – a government submitting to popular will is democracy in action. But there's a "but".

At some point, Australia needs ambitious politicians with an audacious budget. Not the one we saw last year, which emphasised austerity and small government and clearly didn't hit the balance between taxation and spending Australia wants. Rather, we need a budget that's serious about long-term structural fixes, such as tax, Medicare, and Superannuation reform, whilst providing Australians with a level of health, education, and welfare spending they think is fair.

It's no easy task. And whether or not there's anyone or any party on the political landscape that even has the courage to try again is very much in doubt.

Follow Girard on Twitter: @GirardDorney

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