The good and the bad of the budget

So it's the day after the day after the budget.

It doesn't seem like all that much has changed. That's because the real budget atrocities are never known on the night. It's all the grants for all the revolutionary social groups that are the real killer.

You can rest well assured that I will be sniffing these out. Inner City Legal Centre I'm looking directly at you. And that's just the start.

But there are some things to say right off the bat.

First up, Joe Hockey's speech was dull and boring. He was not as bad as Wayne the Wonder Treasurer. But Smokin' Joe was in that general vicinity.

Not that presentation changes anything about the substance. But it does help with the sell.

And so far this has been terrible.

For a start, Hockey has a powerful argument on his side that he has not used effectively. Interest is a killer and when it runs into the billions that's a lot of lost opportunity for our nation. Hockey should spend far more time talking about how much interest we are paying and how much interest his budget will save.

Then there is the problem of trust.

Abbott and co were elected because the other mob were a bunch of no good, rotten dirty liars. But at least we all know that Julia Gillard owned up to the fact that she had not kept her promise.

Joe Hockey didn't even have the decency to do that with his own porkies.

No new taxes means no new taxes. But there are new taxes. That's a broken election promise. A lie if you will. And Joe Hockey's verbal somersaults in his post-budget interview on the ABC did not help.

I don't believe we need any new taxes. But if Hockey really thinks he must break one election promise about no new taxes in order to fulfil another promise to (eventually) return the budget to surplus, he might as well come clean and say so.

However, Hockey's speech and his post budget comments just jumped around this issue. It made him look like he had something to hide.

And of course, he does. The vast majority of the revenue raising measures are going towards new spending programs. They aren't paying down debt at all. And that is the real reason Hockey couldn't lump home tax increases to Labor's wasteful spending.

The problem with Australia's budget is not revenue. It's expenditure. All sorts of stupid ideas are receiving government funds. For instance, Hockey is still going to pump $2.55 billion into a program to tackle 'climate change'.

And then there's the paid parental leave scheme. We don't have any idea how much that will cost yet because Joe Hockey has only factored in payments for the current and much less wasteful Labor scheme. But it's still wasteful and treats women like slaves.

It's also going to hit hip-pockets to the tune of $1.9 billion.

And it still locks out stay-at-home mums.

Then there's childcare. This will cost a whopping $28.5 billion over the next four years. What a waste of money. Again, stay-at-home mums miss out, even though they are doing the best thing for the child. That also means they are also doing the best thing for the nation.

Mums and bubs are viewed as cogs that are out of place if they are not slaving away for the 'economy' by both sides of politics. But they are not cogs. They are not slaves. They are people.

Joe Hockey says that women have the choice to stay at home. But many feel that they have no choice at all but to join the childcare conga-line and work.

Real reform in this area would be to introduce income-splitting for families while reducing government payments and tax churn. That would increase choice, provide incentives to work as a family, reward those families that stay together and reduce the size of government. It's also the best long-term way of addressing the problem of Australia's ageing population. It's win, win, win, win and win.

I will add another point here that will seem controversial but should be considered. I am not philosophically opposed to Medicare co-payments. Broken promise aside, I think this idea is a good one because services that are free are not valued.

It results in people taking less responsibility for their actions. I would especially extend co-payments to things like state school fees (although this is a state issue). Even a token payment would lead to increased parental buy in and that necessarily means better educational outcomes. And if I had my way entirely, school grants would be paid directly to families to use as they see fit, while all schools would be required to charge fees.

However, these criticisms aside, the budget did have some good points.

The carbon tax and mining tax are going.

Cutting back on spending and the axing or merging of the many frivolous government entities is the right thing to do. This is where most of the savings come from, even if our nation will spend $30 billion more this year than it earnt. That's $1,200 debt in the last 365 days for every man, woman and child.

There have been 230 Federal programs abolished and 70 agencies, bodies or boards given the flick. The climate change agencies were a prime target and it seems many have been cut. That's good news. But there are many more to go.

A big win is the $2.5 billion in savings achieved from the sensible and humane measures undertaken to stop people smuggling. Six more detention centres will close.

Finally, this budget has highlighted a glaring problem in the state of our Federation.

For too long, Canberra has interfered in the roles and responsibilities of the states. It controls their income and it controls their expenditure. Every election, both sides of politics promise grants for a hospital here, a road there and a new school program. It's bad policy, bad governance, bad for holding anyone to account and bad for competition.

The states are dependent on the Federal Government due to mission creep centralisation by successive Labor and Liberal administrations. It should not be this way and the states should be free to raise their own revenue, provide their own services and compete with each other.

Hockey has thrust this problem into the spotlight by simply cutting back on Federal payments while citing the fact the Canberra should not be responsible for schools and hospitals. It's true. But it's also cheeky.

You can expect a debate to begin almost immediately about an increase to the GST. That's not necessarily a bad thing.

It could lead to real taxation reform, including lower income tax and result in a much clearer delineation of responsibility between the levels of government.

And if that happens, it means this budget will have kick-started the most necessary and most required debate about federation that Australia hasn't had since World War Two.