No tax cuts, we’ve spent it all

Australian Treasurer Peter Costello has delivered his third tax cut in three years, and at the same time as also increasing spending in key areas. That is a nice balanced approach.

The latest round will deliver $23 billion of tax relief. And despite the Australian surplus being less than one quarter the size of the ONZ surplus Dr Cullen says he will not give any back, instead he is going to spend it all.

The size of the surplus is so large that it has been embarrassing Dr Cullen. He has tried to obscure it, but having failed I now predict the spend-up in the budget will be the largest in history, so he can claim there is no possibility for tax reduction.