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28.08.2018Turnbull bows out: his legacy for taxpayers

Australians have quickly had to get used to the idea of ever-changing Prime Ministers.


Australians have quickly had to get used to the idea of ever-changing Prime Ministers. Gone are the days of Robert Menzies, who served for 16 years in the middle of the twentieth century: now, it seems like there’s a new PM every few years. Last week, it was the turn of Malcolm Turnbull to bow out after just three years in office – and now former Treasurer Scott Morrison is taking on the role of Australia’s political leader.

The question for most Australians, though, is how that power gets used – especially when it comes to their money. How exactly, then, has Malcolm Turnbull’s rise to power impacted the financial position of the average Australian, and what’s to come as Morrison takes the reins? This article will look for some answers to these important questions.

Public spending

In the past, the Liberal Party has been perceived as fiscally responsible. Back in 2014, the Liberal-National coalition decided that it would embark on the same sort of austerity programme seen in many other western economies, and as a result they made cuts across the board. When Turnbull assumed office, he did not exactly unleash an avalanche of public spending. It was his then-treasurer Morrison who back in 2016 said: You have to spend money wisely, you have to target it and the ultimate test is will it drive jobs and growth - we’ll afford the things that need to be afforded in health and education.”

In some ways, though, Turnbull did take a less austere position than his fellow Liberal predecessor, Tony Abbott. Turnbull’s flagship budget was perhaps the one he coordinated in 2016, and that found room for almost AUD$3bn to spend on road development programs in states like Victoria and Queensland: the Monash Freeway from central Melbourne to the Gippsland area, for example, received AUD$500m. Defence also received a big financial boost under Turnbull: innovations in the armed forces were encouraged through a AUD$730m windfall for the Next Generation Technologies Fund, while Australian armed forces ISIS fighters in the Middle Eastern got AUD$363m.

Taxes

Other than for employees or contractors in affected sectors, the impact of public spending decisions often affects people’s wallets in an indirect way. Tax decisions, though, are much more direct – and they have much more power to hurt a person’s bank account. Turnbull’s most recent taxation decisions were outlined in the 2018 budget – and in this, taxpayers who earned $37,000 or under were told they would see a drop in their tax bill of $200. However, better news came for those who earned $60,000, as they looked set to receive a $530 discount. While Turnbull may have broken with those before him a little on austerity, then, he was unable to dodge accusations that he was a typical Liberal looking to cut taxes mostly for the rich.

What’s next?

But while it’s interesting to look back at the legacy of Malcolm Turnbull, it’s also worth looking at the economic positions of his successor. Only time will truly tell what impact “ScoMo”, as he is known, will have on Australians’ personal finances. But his public statements to date reveal a number of insights into the sort of government he may hope to lead.

As is common for Liberals, Morrison appears to have a big commitment to economic growth - and it’s been said that his personal motto is, simply, jobs and growth”. He also tends to take a quite upbeat view of economic performance, too – so much so that experts ended up raising question marks over the accuracy of his perspective on Australia’s chances for economic growth.

With each departing Prime Minister, it’s useful to look back at what they offered – and what legacy they leave. Malcolm Turnbull will be known for not stripping the Australian state down to the bone despite austerity pressures, but he will also be known for delivering tax cuts to some. How Scott Morrison performs in this regard remains to be seen – although, given his optimism as Treasurer, it’s looking likely that he’ll be feeling upbeat about his chances.



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