By Mick Le Moignan

AROUND the time you sit down to peruse your JEP on Monday evening, Australia’s Treasurer, Jim Chalmers, will be getting up to present his fourth annual Budget on Tuesday 12 May.

Naïvely, I assumed I would have to delay writing about it until my next column, in four weeks’ time, but the secrecy and sanctity of Budgets are not what they were. Nowadays, “government sources” are leakier than colanders: budget cuts and taxes are picked over like market fruit, for months before the official announcements.

I remember the annual ritual of the UK Chancellor of the Exchequer holding up Gladstone’s red briefcase for photographs, almost taunting the waiting reporters with the surprises he would reveal later, in the House of Commons. The Australian equivalent is the “Budget tree”, a brilliant red maple which assumes its autumn foliage just in time for Budget Night, each May.

Like Jersey, Australia pays through the nose for many more (and more expensive) politicians and public servants than we need or can afford. The Budget is their chance to fund themselves and their activities more equitably and efficiently.

The major cut in this year’s Australian Budget was announced three weeks ago, by the Health Minister, Mark Butler, at the National Press Club. The National Disability Insurance Scheme (NDIS) was the great social achievement of Julia Gillard’s government in 2013. It is effectively a special and separate extension of the NHS for those with disabilities. However, costs have been increasing at an unsustainable rate and need to be curtailed.

Currently, 760,000 people benefit from the NDIS (from a total population of 28 million). By 2003, the plan is to reduce that to 600,000. Costs will drop from a forecast $70 billion pa to $55 billion. This cut is not due to Trump and Netanyahu’s economically disastrous war on Iran, but because careless and/or corrupt providers and participants have treated the NDIS as a cash cow and milked it dry. Unusually, the measure has wide, cross-party public support.

Another Budget measure that has received much advance publicity is winding back implausibly generous tax concessions for wealthy, generally older property investors.

These were originally introduced by John Howard’s government in 1999.

Owners of rental properties are allowed “negative gearing”, whereby they can set all expenses, including loan repayments on rental properties, against their income. Clever accounting often results in the payment of low or no taxes. In addition, they can claim a 50% discount on capital gains tax applying to properties owned for at least a year.

This is what economist, Ken Henry, calls “intergenerational bastardry”. The term has now been sanitised as its antonym, intergenerational equity, which will be one of the bywords of Chalmers’ Budget tomorrow. The great Australian dream of home ownership is now out of reach for many younger people, unless they are lucky enough to be able to draw on “the Bank of Mum and Dad”, even with the Albanese government’s 5% deposit scheme for new owners.

It takes longer than ever to save for a deposit and requires a higher percentage of household income to service a mortgage. According to the right-leaning Grattan Institute, the price of a typical Australian home, 20 years ago, was four times the median income. Now, it is eight times the median income, ten times in Sydney.

Young people in Jersey are apparently in a similar position. So, we Baby Boomers (born 1946–1964) must forego our generous tax concessions in favour of Gen X, (born 1965–1980), Millennials (born 1981–2000) and Gen Z or Zoomers (born 2001–2020).

Given that the increases in property values have funded comfortable retirement for many or most Boomers, it is hard to argue with the justice of that idea – although the hapless Australian Opposition will certainly do so, in a desperate effort to win votes.

The 2026 Budget will be notable for a radical provision that will NOT be included. The leading progressive think-tank, the Australia Institute, conducted research and then a campaign to propose a new 25% tax on gas exports. They made the argument that multinational companies continue to make a fortune from selling Australian gas overseas, which keeps domestic prices artificially high.

The companies have run rings around both sides of politics with strategically placed donations and lucrative employment opportunities, both before and after parliamentary service – and they have never paid a fair price for the gas, which belongs, not to them, but to the Australian people. The campaign for a 25% tax struck a chord, winning majority support with all age groups.

The Independent Senator, David Pocock, who seems as outstanding a politician as he was as Australia’s rugby captain, persuaded a Treasury official to admit that, on the latest figures, the tax on beer generated more revenue than the Petroleum Resources Rent Tax.

The video of this exchange is probably the most watched question ever posed in Senate Estimates hearings, especially among the under-30s.

The problem is that PM Anthony Albanese has just returned from visits to several South-east Asian nations. He obtained promises from them to keep supplying Australia with vital supplies of petrol, diesel and fertiliser, despite shortages caused by the Iran war, in return for Australia being a reliable trading partner, delivering such necessities as gas.

Tellingly, Albanese did not dismiss the proposal as unfair: he simply argued that it was not the right time to place a tariff on gas, which might be passed on to those nations.

Major tax reforms are not achieved overnight. The two cuts outlined above, to the NDIS and on rental property investment, have been under discussion for several years. The government, secure in its huge majority, has at last found the courage to act.

If public pressure continues, a gas tax may well find its way into the statute books in a future Budget. It’s rare for a proposed new tax to be so popular. A future Treasurer, keen to balance the nation’s books, may find it irresistible – but I’m pretty sure he won’t be springing it on us as a welcome surprise on Budget Night.