There's a multi-billion-dollar tax grab and increased debt in Tim Pallas's seventh Victorian budget, but the Andrews government is not sweating over deep political fallout.
This is a bread-and-butter budget from Mr Pallas, the type of budget we have come to expect from the Andrews government.
Heavy on service delivery and not particularly concerned with burdening future generations with mountains of debt, and raising taxes for those it believes can afford it.
Those paying extra to fund mental health are big business with a national payroll of at least $10 million, and those contributing extra to budget repair are people with properties worth at least $1.8 million.
But it does not mean it will be an easy sell for Tim Pallas and Daniel Andrews when he returns to work — he's due back next month.
Typical third year budget
Business was already fuming over increases to property taxes, and some are angry that once again it is being left to private enterprise to foot the bill for big reforms.
It is hard pill to swallow for many businesses given the government has overseen $3.8 billion of cost overruns on major projects.
The Australian Industry Group's Tim Piper said business was happy to do its part for mental health, so long as their efforts were acknowledged and it is slugged no further.
"We want to make sure that business has a free run from here on in,'' Mr Piper said.
Others support the idea but say the $10 million threshold is too low.
Labor playing a tactical hand
Labor will be hoping no businesses move interstate or shed staff as a result.
Of course, business doesn't like more taxes, but this government, as always, has played a politically tactical hand.
And it has timed it in a third-year budget – this would be a much harder sell in next year's election-framing budget.
Like family violence, it has taken the mental health royal commission to break the political cycle and make spending vast sums on these critical reforms palatable.
The fact so many people have experienced mental health issues mean the sales pitch won't nearly be as hard as it could be.
Don't tax the family home, opposition warns
Opposition Leader Michael O'Brien has already laid the foundation against the levy, saying a responsible, competent government would find ways to fund such an essential service through normal government revenue.
And there are also cost blowouts in major projects that the Opposition has seized upon, highlighting that had there been fewer overruns the levy would not have been needed.
Then there are the tax hikes which are targeted at wealthier property owners and businesses worth tens of millions.
ABC News: Michael Barnett
)Again Labor has made a calculated call – some might say arrogant – because its traditional base will not be directly hit, although there are serious warnings the property hikes may have a flow on effect on buyers, renters and developers.
There are 26 suburbs in Victoria where the median house price is above $2 million and O'Brien has attacked the increase as another tax on the family home.
Most of those suburbs are in traditional Liberal seats, including those Mr Andrews won at the 2018 so-called "Danslide" election.
It's a sign of how confident the government is about winning next year's state election that it is not worried about voter backlash, although it must manage turning off aspirational voters.
Federal Treasurer Josh Frydenberg has already signalled that state Labor's tax hikes will be used to defeat Anthony Albanese federally.
"They've increased taxes on the housing industry and that's come at exactly the wrong time, when the economy is recovering they're whacking more taxes on the Vic people. But this is what Labor does,'' he said.
Mr Albanese will square off with Scott Morrison before Mr Andrews defends his office, meaning voter backlash against higher taxes might just get exhausted on federal Labor.
There are some big fiscal challenges in the budget — debt continues to grow and the hard task of managing public sector wages has been kicked down the road again, probably until after next year's poll.
And with that election due late November you can bet your bottom line that next year's budget will be chock full of vote-grabbing measures with less focus on budget repair.
https://news.google.com/__i/rss/rd/articles/CBMiaGh0dHBzOi8vd3d3LmFiYy5uZXQuYXUvbmV3cy8yMDIxLTA1LTIxL3ZpY3Rvcmlhbi1idWRnZXQtdGFjdGljYWwtZ2FtYmxlLW9uZS15ZWFyLWZyb20tZWxlY3Rpb24vMTAwMTU0MDMw0gEoaHR0cHM6Ly9hbXAuYWJjLm5ldC5hdS9hcnRpY2xlLzEwMDE1NDAzMA?oc=5
2021-05-20 21:20:57Z
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