Abbott shifts the budget’s burdens

by Richard Denniss in The Australian Financial Review
Originally published in The Australian Financial Review on March 25, 2014

Like Qantas, the problem with the Commonwealth’s budget is a lack of revenue. If Qantas were to increase fares by about 3 per cent they would be back in the black, but for the time being at least, Alan Joyce has his eyes set on maintaining market share rather than maximising profits.

Similarly, the Commonwealth budget has seen revenue decline by about 3 per cent of GDP in the past decade and, in the words of Treasury secretary Martin Parkinson, “if we had the same revenue collections today as we had in 2000-2001, guess what: there would be no budget deficit at the Commonwealth level”.

Like Qantas, the Abbott government is happy to wear a few years of budget deficit as it wages its war against its workforce. While shedding 14,000 public sector jobs will impose big costs up front, restoring revenues to their historical levels would quickly and effectively restore the budget bottom line, but again, like Qantas, the Abbott government is playing a longer and bigger game.

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