Nine ways to fix the budget

As suggested by the experts and our readers.

Prime Minister Tony Abbott wasn’t kidding when he said his government would deliver a “tough” budget in his first term. Three months after the fact, the government’s agenda for economic reform is still firing up debate.

Earlier this week, Assistant Treasurer Mathias Cormann flagged that the government would have to tweak some of the new measures in its budget to get them past the Senate. If it wasn’t for Clive Palmer’s China tirade on Q&A, this issue would have likely taken centre stage in Canberra this week. 

In anticipation of this looming debate, we posed a hypothetical to subject-matter experts and our readers:

If you could make one change to this year's federal budget, what would you do and why?

The end result was a diverse list of budget reforms, some of which have received scarce political or media attention. 

Here’s the rundown.

  1. Withdraw co-payments for GP visits (Alison Verhoeven, AHHA)
  2. Axe the paid parental leave scheme (Yolanda Vega, AWCCI)
  3. Neutralise the vast telecommunication access prices differences for rural and urban users by adding backhaul equalisation to the telcos' universal services agreement (Mark Gregory, RMIT)
  4. Rethink budget ideology, don’t increase budget spending without raising taxes (Sinclair Davidson, RMIT)
  5. Abolish the need for young people to wait six months before being eligible for the dole (Cassandra Goldie, ACOSS)
  6. Weaken the government’s proposed interest rate regime on HECS debt (Bruce Chapman, ANU)
  7. Invest in new technology to increase the output of the public service sector rather than cut jobs (Kevin Noonan, OVUM)
  8. Tighten tax concessions on superannuation (John Daley, Grattan Institute)
  9. Adjust the tax system to limit the extent to which most households are paying the maximum tax threshold. (Saul Eslake, Merrill Lynch)

You can read each of the respondents full reply to our question here.

We also polled our readers through our Facebook and Twitter pages and came up with an equally diverse range of replies. While some want Hockey to burn the budget and start again, other were more measured in their responses. Here’s a mix of the answers we received. 

And on our Facebook page:

Graph for Nine ways to fix the budget

You can read Alan's original piece here

Graph for Nine ways to fix the budget

Graph for Nine ways to fix the budget

So what can we deduce from this? It seems the discontent generated by the budget runs deeper than dissatisfaction with any one policy point. But the damage has been done: even if the Coalition tweaks it to get it through the Senate, the population is likely to remain unhappy.

The Coalition has had a difficult time selling its budget vision to the public. Its basic message of making hard decisions now to prevent future economic strife has been undermined by extravagant spending initiatives such as the paid parental leave scheme.

It will be interesting to see what the next couple of budgets look like. They always say a government’s first budget is its hardest. Will the Coalition stick to its original narrative and cut further, or will it change its tune and back off in a bid to get re-elected?  

Join in on the debate on Business Spectator’s Facebook and Twitter page. Or if you’re a subscriber, leave a comment below. You can contact the reporter @HarrisonPolites on Twitter.