The best word for this budget is complacent. Theres nothing wrong with it; its keeping us from getting further into trouble. But its doing little to deal with the many troubles we already have: the transition to renewable energy, declining home ownership, the rental crisis, and problems with Medicare and education.

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And thats before you get to the budget. All those problems will take money to fix but, as Treasurer Jim Chalmers insists, theres little to spare. This years expected budget surplus is a one-off, with the prospect of government spending growing a lot faster than tax collections over the coming decade. The inescapable answer is that we need to pay more tax to cover our growing demands on the government. Whats the government doing about it? Not much.

Rather, its insisting on pressing on with huge tax cuts in a years time, the lions share of which will go to high income-earners (like me) whove hardly felt the surging cost of living. This will take us in the wrong direction and help those who least need helping.

This is the budget of a government that wants to be loved by everyone the workers, the retired, people with huge superannuation, small business, big business, multinational miners, American generals, everybody. So, its doing as little as it can to annoy anyone, hoping to stay popular and win another term in office in 2025. Then it will be free of its foolish promise not to increase taxes and can start thinking about working on a few problems.

Until then, its treading water. But its hard to believe a government thats so anxious to avoid offending powerful interest groups in its first term will become a roaring lion in its second.

The budgets changes to the special tax on offshore gas producers will raise $2.4 billion over four years. Really? Thats $600 million a year chicken feed.

The producers mild reception to this impost tells you they were let off lightly.

Similarly, the decision to cut back the big tax concessions going to people with millions in superannuation was limited to those in the top 0.5 per cent. Thats going far too easy on the well-off.

Chalmers plans to spend a few billion on each of our big problem areas, but not enough to make much difference. The unemployed, living in poverty, are getting a princely pay rise of $3 a day, for instance.

Its hard to believe a government thats so anxious to avoid offending powerful interest groups in its first term will become a roaring lion in its second.

But dont listen to smarty-pants economists telling you Chalmers modest bits of help with the cost of living will add to inflation. Theyre sort of right, but using a microscope to find the problem.

Likewise, dont get too excited by the news that, by early next year, wages will be rising faster than prices. Its only a forecast, and the next wages forecast the authorities get right will be their first in a decade.

In any case, bracket creep means higher wages cause the income tax you pay to rise at a faster rate, leaving a smaller increase in take-home pay.

Chalmers isnt admitting that, next financial year, the economy will grow because our population grows, not because were better off.

He says he couldnt do everything because he had to produce a budget that is responsible and sustainable. This one is neither.

Its unsustainable because the government cant go on increasing spending on all the things we want from it, without raising the taxes to cover it. Especially when, as Chalmers never tires of pointing out, we already have great public debt and must limit how much we add to it.

Its an irresponsible budget because, at a time when it should be increasing taxation, its about to have a big tax cut. The promised stage-three tax cuts were born in irresponsibility and remain so. It was irresponsible in 2018 for Malcolm Turnbull to promise them, six years ahead of an unknowable future (including massive government spending on the pandemic).

It was irresponsible for Scott Morrison to put them into law, five years ahead of their delivery. Labor said they were bad, but voted to enact them in 2019. It compounded its irresponsibility by promising at last years election not to rescind them.

But apparently, not keeping a promise irresponsibly made and irresponsibly delivered is unthinkable. Really? To be fair to Chalmers, however, nor has he reversed the secret tax increase that the Coalition snuck through just before the election, when it decided to discontinue the low and middle income tax offset known as the lamington.

Many of those people benefiting from the budgets centrepiece, the cost-of-living relief package, will feel this increase in their taxes after next month, when they discover their annual tax refund is up to $1500 less than last years.

But not to worry. And hang in there. It will all be fixed after the next election.

Republished from The Sydney Morning Herald. May 9, 2023