"Australia needs a reality check on the state of the budget.'' So said the Minister for Finance, Mathias Cormann, last night in a speech at the Sydney Institute. These were his opening words. We agree. We also believe Senator Cormann himself needs a reality check on the public perceptions and political ramifications of the first Abbott-Hockey budget.
The public believes the government has presented a budget which is unfair by pushing too many sacrifices onto the unemployed, students, aged pensioners and the poor. It has not helped that Treasurer Joe Hockey has given one of the most accident-prone budget sales jobs in many years. The budget itself has proved politically damaging and unpopular with the public.
What an irony that the Abbott government, with the help of the Greens, has abolished the federal debt ceiling and introduced a tax surcharge on high-income earners, making it one of the biggest tax-and-spend governments in history, in contradiction of its own rhetoric. The government has not produced a budget that the public regards as fair. It has lost the argument. The minor parties have been all over the place.
Given all this the Herald believes it is time the government made some serious compromises on its remaining budget agenda. It needs to address the perceived unfairness. It needs to give up trying to appease Palmer. It needs to open discreet negotiations with the Greens, and the Greens should reciprocate.
The Greens have said they will never vote for a budget which includes a $7 fee for visits to the doctor, an issue which has also caused the government grief with the public, the crossbenchers and Labor. The idea that most of the proceeds from this tax will go into a medical research fund has been a giant miscalculation.
The government that talks about the drastic need to cut debt and deficit is the same government that wants to pour billions of dollars into a new medical research fund and billions more into one of the most generous paid parental leave schemes in the world. This makes no sense.
If the government were to abandon these two big tax-and-spend proposals it would not only be true to its own overarching budget promise, it would be more likely to find compromises from the cross benchers and the Greens. It also needs to scale back the harshness on the unemployed.
In short, the government needs to re-make its remaining budget. This is its reality check. It could then get on with governing, and seeking to restore its standing with the public.
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