Budget bamboozled: What it all means in plain english

Budget 2022: A composite image of Anthony Albanese and Kim Chalmers and Australian currency.
Confused about what the federal budget is? Here's a breakdown. (Source: Getty)

I had this conversation with my 10-year-old daughter on Monday:

Me [lighting up]: Yay, it’s the Federal Budget tomorrow night.

Her [eye rolling up]: Urgh, that’s always so boring. I don’t understand the words they say.

Me: Which words?

Her [to my amusement]: Well, “Federal” for starters.

I’m guessing she’s far from the only one to be left more than a little bamboozled by the federal budget.

And just wanting to know the bottom line. So, no judgement and no boring bits: Here’s the budget plain-splained (or should that be pain-splained?).

Read more budget news:

The budget plain-splained

Federal [for my daughter]: In the whole country’s interests. You know, Advance Australia ‘Fair’. Hmm…

Budget [for my friend who wondered if the speech tells us where the hell the government is going to spend all the tax we pay]: Yep! And some that companies pay – though the big ones have expensive accounting teams trying to minimise it.

Inflation: Big word for “things are fricking expensive” right now. The challenge on Tuesday was that if the government spent a lot, the economy gets over-excited, and things get more expensive. It’s possible they showed enough restraint to keep inflation ticking down and help a few people cope (I’ll get to that next).

Expenditure: That’s a fancy way to say “spending”. And since we pay for it, it should be spending we fancy. Was it? I particularly liked the health and Medicare measures, the bit of power bill relief and the benefits increases for single parents, older Aussies and the unemployed were also nicely targeted relief. There were a few kicks in the teeth though – I will pain-splain in a sec.

Revenue: Sometimes called ‘consolidated revenue’, mainly to make it more of a mouthful… it’s money in. Which should by rights be more than the ‘money out’; we all know not to spend more than you earn. And for the first time in 15 years, an Australian government hasn’t. It’s a surplus party – though millions are suffering through it.

The budget pain-splained

Integrity measures: Uh-oh… if you’re cheating the system, they are after you. And you deserve to be caught. With Coalition governments, Budgets in the past decade have typically tried new ways to crack down on benefits fraud but under Labor now, companies are in the firing line. If you are a company yet to do your tax returns since the pandemic though, you won’t be fined if you get it in by June 30.

Low-income tax offset: A tax break that’s been around a few years but is scheduled to end in July this year, which was not mentioned. This means a tax rise for Aussies who can least afford it, which might wipe out any cost-of-living relief.

Stage 3 tax cuts: Another elephant in the (inequality) room. Generous tax cuts for middle and high earners look like they are still coming in on July 1, 2024. They represent an extra $25 a day to some of the wealthiest Australians.

Poverty line: Again, not mentioned but the $2.86-a-day increase to unemployment benefits leaves people without a job with nearly half what is required to live. From September, the day payrate will be $52.37 and the Henderson poverty line suggests anything below $87.32 places a person in poverty.

Structural deficit: Forget that forecast, teeny tiny surplus – in reality, the country’s coffers are still going backwards. There are some big steps to stop it, notably measures to clamp down on spiralling NDIS costs.

The budget same-splained

Fiscally responsible: This phrase has been trotted out by every flavour of government since the global credit crack-up and so began the obsession with blaming the other side for deficits [insert eye roll emoji]. Treasurer Jim Chalmers last night added the impressively alliterative slogan: relief, repair and restraint.

Indeed, if you’d known this in advance, these ‘R’ words would have made for a decently sozzled drinking game. But on the whole, they sum up the budget.

In Chalmer’s words to the country: "We think we've struck the right balance between what we can afford and taking into consideration the economic pressures in the economy."

It will help a few, a bit. And shouldn’t hinder the economy too much.

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