EDITORIAL: Budget from hell still needs fixing after three months

It is often held that the measure of a Budget is how long it remains contested.

If it disappears from the headlines swiftly it has hit the mark.

When Treasurer Jim Chalmers delivered the Budget on May 12 he declared it was “the most important and ambitious Budget in decades.”

The way things are looking, it will be remembered for decades too. For the wrong reasons.

For starters, it was immediately seen as the broken-promises Budget for the way it overturned numerous pledges not to change negative gearing and the capital gains taxes.

That broken promise hit Prime Minister Anthony Albanese and Dr Chalmers between the eyes straight away.

Their credibility was shredded.

It raised the obvious question: why should anybody believe any promises you make in the future?

The question continues to dog the Albanese Government and will be an ongoing issue all the way to the next election.

Aside from the wider context around loss of trust, many of the details in the Budget quickly unravelled in a seemingly never-ending list of unintended consequences.

There was a storm around claims that the treatment of future discretionary trusts set up to distribute inheritances amounted to a new “death tax.”

Mr Albanese was hammered by memes by startups and small businesses worried about the capital gains tax changes — and felt the need to take to social media to offer explanations in a bid to douse the flames.

Powerful business groups raised concerns that higher CGT on businesses could hit investment.

Even WA Labor Premier Roger Cook went public to echo those fears.

The Government pushed on with Budget legislation and said it would iron out any flaws later.

It was an approach that would not have been out of place in the operational model of the fictional government in the series Utopia.

Mr Albanese said in May that the “core elements” would be in the legislation, and “then what we will have is legislation with the implementation and details”.

And it saw a new tag applied — the back-to-front Budget.

As the weeks passed by the Government’s “intergenerational equity” tax changes which it said were aimed at helping first-homebuyers into the market combined with the uncertainty over interest rates and the Middle East to push house prices down and home-loan applications fell.

This week credit check company Equifax revealed that in the year to July, applications for home financing from property newcomers plunged 19.2 per cent, which was the worst annual decline since December 2022.

And by Tuesday, 14 weeks after the Budget was handed down, it had not dealt with the so-called “widow tax” — where grandfathering for negative gearing tax breaks and the 50 per cent capital gains tax discount on an investment property wasn’t carried through when ownership was transferred in the event of a death or divorce.

It was then revealed that Opposition Leader Angus Taylor had written to Mr Albanese to demand he fix the “widow tax” in return for Coalition support for reforming the out-of-control and costly NDIS.

Fixing the Budget from hell goes ever onwards.

Responsibility for the editorial comment is taken by Editor-in-Chief Christopher Dore