Labor delivers a redistribution of wealth budget.

Cartoon: By Pickering.

In delivering what they hoped would be a surplus budget, Labor has stuck to the tried and true formula of abandoning promises in a ham-fisted attempt to buy votes. The projected surplus of $1.5 billion is miniscule and even then is unlikely to come to fruition. It has to be remembered that the projected deficit for the last financial year was about $21 billion; the reality, more than double that.

Ever since the mining tax was mooted the government have attempted to sell it by claiming that it was needed to fund a cut in the corporate tax rate. This was supposed to ease the pressure on the business community, which was claimed to be suffering the effects of a ‘two speed’ economy. This has been dropped in order to hand out money hand over fist in order to buy votes.

Business has not had a change in fortune and no explanation was given as to why the tax cut was no longer necessary. Just suck it up guys.

Rather than being a responsible budget designed to put a halt to the ever ascending debt spiral, it is as Swan said a typical Labor budget with smoke and mirrors, designed with the next election in mind. Rather than being about being fiscally responsible, it a massive handout budget; rather than cutting government expenditure, it increases it by over $200 million.

Much of it has been achieved by the addition of the carbon tax and the mining tax added to ‘savings’, which are actually tax increases. A great deal has also been done by bringing projected expenditure for next year forward into this year, and deferring more into the following year.

This budget effectively strips funds from major employers with the mining and carbon taxes, reduces infrastructure spending and diverts it into increased welfare entitlement spending.