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Is the answer hypothecated?

By Graham Young - posted Monday, 18 February 2013

Is there a way that the government can meet voter expectations about fiscal policy while funding its two big programs – Gonski and the NDIS?

Our qualitative polling of 1266 Australians balanced by voting intention suggests that there might be.

In the first place the government ought not to worry too much about budget surpluses. Not because they don't matter, but because there are two kinds of voters – those that will, or might, vote for the government, and those that won't.


The second kind thinks that surpluses do matter, but their expectations of the government and its past fiscal management are so low, Wayne Swan is merely meeting those expectations by abandoning his surplus pledge.

They aren't going to vote for the government, and they have a long list of complaints, and not posting a surplus this year is not at the top of it.

The first kind is either well-disposed towards the government or the policies. In this case they see the promises and the benefits they bring as being more important than the transient pleasure of a positive national bottom line.

They are also convinced that the economy is in bad shape. This is bad for the treasurer's reputation as a good manager, but it convinces many that a counter-cyclical budget deficit is a responsible policy option.

However, while tolerant to a budget deficit this year, voters generally don't support continuing deficits and overwhelmingly think that taxes are either about right, or too high.

Even amongst those who are prepared to pay more tax themselves, 59% would cap that amount at $20 a week or less, which wouldn't fund much.


The government appears to agree, and it is whispered that they might tax superannuation more highly.

This wouldn't be popular with our respondents who placed increased taxation of superannuation dead last on their list of acceptable tax increases, behind even increases to personal income tax. Seems we're all worried about the future post-GFC.

Outside of Liberal voters there is also little support for increasing the GST, thus ruling out an increase in the indirect taxation base.

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This article was first published in The Australian.

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About the Author

Graham Young is chief editor and the publisher of On Line Opinion. He is executive director of the Australian Institute for Progress, an Australian think tank based in Brisbane, and the publisher of On Line Opinion.

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