The Milky Bars are on him: Budget 2005-6

By Alex Millmow

Over half a century ago Douglas Copland described Australia as a milk bar economy. How much has changed?

In presumably his last budget before embarking on greater adventures it never seemed likely that Peter Costello would deliver a classic Tory fiscal document. Given all the economic superabundance, it was - as he admitted - an easier budget to bring down. It started with the tired old conjuror's trick of announcing a huge surplus figure and closed with a fanfare of tax cuts all round. It's a wonder he didn't say, 'The milky bars are all on me'.

The budget's bedazzling generosity to Australians might be tempered by the fact that it's pitched towards the upper end of the income scale. For most of us it will mean a sandwich and two milkshakes once a week; for those on a six-digit-plus salary, a weekly three-course lunch at some swanky restaurant. The tax cuts and welfare-to-work programmes recall the observation of the great American economist, J.K. Galbraith, who characterised the argument from the right like this: 'In recent years, the rich have not been working because they have had too little money, and the poor have not been working because they have had too much'. The truth is we all enjoy an increase in our wealth but the present tax system eroded that pleasure. This is why it is not liked by those who have to pay the most.

(This article first appeared in the Canberra Times)