Something has happened to the Australian people over the 30 years I’ve been covering Budgets. In that time we’ve become more trustworthy because Treasurers nowadays tell us so much more about what will come out at 7:30 pm on the second Tuesday in May.

Once upon a time, you heard just about nothing because it was thought that some smart foreign exchange trader would get an advantage from knowing that the company tax rate was to be cut or a big tax cut was coming.

Sure, politicians a few weeks out from the Budget still play the game when asked a curly tax or spending question. They will answer: “That’s a question for the Budget and the Treasurer.” The implication is “you will have to wait for the Treasurer’s speech on Budget night” but here I am writing a story that was always preserved for Wednesday’s newspapers and the late Tuesday night’s coverage of the Budget on radio and TV.

Why are governments giving away so much before the Budget? One reason is that it amplifies the positive effects of a Budget. This is a pre-election offering and Malcolm needs a damn lot of magnification to change those polls.

Sometimes Treasurers and PMs want to see the potential backlash of a controversial change in the Budget. This happened when Scott introduced the $1.6 million cap on super for anyone receiving a tax-free super pension.

But as per pre-election Budgets, there isn’t any real bad news. However I will try to find some losers to appeal to those reading this who need to know that the world is as bad as they suspect!

Let’s look at winners first and here they are:

  • Those earning up to $87,000 look set for a $10 tax cut.
  • Those who would have seen the Medicare levy raised from 1.5% to 2% to pay for the NDIS will effectively get a tax cut because this potential slug will be dropped. If you earn $100,000 a year, that’s a $500 windfall. This levy hike was going to be for anyone earning above $87,000.
  • Commuters one day will be winners, with a $24 billion boost to infrastructure projects including a rail link from Melbourne to the airport. In Sydney, the Port Botany rail line will be extended to take freight and trucks off the roads. Queenslanders will get an upgrade to the Bruce Highway.
  • Reef lovers will like the promised $500 million to be spent on the reef’s protection.
  • All pregnant women will get the whooping cough vaccine for free.
  • Young spinal muscular atrophy patients will no longer have to pay $300,000 a year for vital drugs. Under-18 year olds will get what they need for $39.50!
  • Lifeline will get $34 million to help those in need of someone to listen to them.
  • Craft brewers won’t see a 40% tax on small kegs anymore.
  • There will be more money for home care and an Aged Care Quality and Safety Commission will be set up to handle complaints about the system.
  • Budget deficit worriers will be happier, with the Treasurer likely to tell us that a surplus will show up earlier than expected. It was supposed to be 2021 after a deficit of $2.5 billion in 2020. 

And now for the losers

  • Those earning $180,000, where the top tax rate kicks in, were expecting to see this level of income raised, which would have meant they might have dropped down a tax rate from 45% to 37%.
  • The Government loses $8 billion by dropping the proposed increase in the Medicare levy.
  • Air travellers with full body x-ray scans set to come to an airport near you! And restrictions to carry on stuff such as liquids, aerosols, etc. could be increased.

You will notice that the list of losers is shorter than the winners, but this is a pre-election Budget, so it makes sense. However, there will be more winners and losers and some of these numbers thrown out get better after 7:30pm tonight because the Treasurer has to come away from the night looking good or it’s bad news for him, his PM and his Government colleagues.

All Australians are currently on a win, though many don’t know it. Even if your economic life isn’t great now, it could be worse! If unemployment was rising not falling, if interest rates were rising not staying where they are, if taxes were rising not falling and economic growth was falling rather than rising, then the budget deficit would be getting bigger rather than smaller and our outlook would be a whole lot worse.

You have to enjoy the good economic times, which I think this year and next will start bringing better wage rises. Yesterday we got to see the latest views on life from business managers/owners in the NAB survey and this is what it revealed:

  • The business conditions index rose to a record high +21.1 points in April, up from an upwardly-revised +15.4 points in March.
  • The business confidence index rose to +10.1 points in April from an upwardly-revised 8.0 points in March.

This is how CommSec’s chief economist, Craig James, reacted to the NAB numbers: “Aussie business conditions are the best on record. And the underlying sub-indexes are near the best levels in over 21 years. Profitability and employment are both at the second highest levels since the NAB series commenced in 1997. And trading conditions are the third best on record. What’s not to like?”

All up with this May Budget, in Australia there are a lot more winners than losers. And this Budget (through a “love us at the next election Budget”) will add to growth and jobs, and we should be damn well positive about it!

It could be a lot worse.