Govt’s blueprint for cuts set to be released, but one thing is missing
The federal government is expected to release its blueprint for spending cuts next week. But commentators from across the political spectrum are pointing out that there’s one big drag on the budget that the report is likely to ignore. So what’s the elephant in the room?
The government wants to encourage certain behaviour or wants us to do something, it can do it two ways, it could pay us directly, or it can give us a tax break – a tax refund when we put in our tax return. Those two things have a similar effect on the budget bottom line. But while the direct spending will be put under the spotlight by the commission of audit, these tax breaks or tax expenditures – there’s a good chance they’ll be left out. People like former Liberal leader John Hewson are now saying that the big tax breaks for things like superannuation should be put under the microscope too.