ANCAP's Budget Blunder - Miscalculation Proves Costly as BUDGET GOES BUST

Archie Perkins - Crikey Chief Editor

The ANCAP government has suffered its first major loss (the first with the term actually underway at least) with the narrow, and potentially controversial defeat of their budget. With the closure of the vote on Monday night at 7pm, the vote stood at 4 AYE (All ANCAP MPs) (EDIT: 3 AYES, as /u/jq8678 failed to vote in time) and 4 NO (Both ALP MPs, /u/showstealer1829, /u/riley8583), 1 ABSTAIN (/u/Slow-Passenger-1542). The Country Labor Party MPs did not show up to vote, and Independent MP /u/model-pierogi also did not vote, however his DNV is understood to be an error of formalities, which will be elaborated on later.

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The downfall of the budget began on Thursday evening, when a tweet from Independent MP /u/model-pierogi revealed that the projected $2.7 billion surplus had a miscalculation of over 1 billion dollars. The Treasurer, /u/Cookie_Monser867 had an actual surplus of $1.49 billion. The Independents previously promising confidence and supply quickly withdrew such support.Both /u/riley8583, and /u/model-pierogi attacked the budget on twitter, with /u/riley8583 stating "There's a hole in your budget, dear ANCAP". The MP for Mayo, /u/Slow-Passenger-1542, a usually quiet tweeter, also made his views known on twitter, stating "Budget grade: C-". It seems that C- isn't a passing grade, but wasn't enough to fail as the centrist MP has abstained on the budget, gridlocking, and leaving the budget unable to carry successfully. Further compounding this issue, the leader of the LNP, and MP-elect for Melbourne /u/nmtts- identified that inconsistencies were rife in the budget, with $900 million discrepancy in education funding.

One MP on twitter alleged that more calculators were needed in the Treasury Office...

It wasn't just miscalculations that formed the budget opposition. A key agreement previously made with /u/model-pierogi for the government's confidence, was $4 billion in funding for for the 2032 Olympic and Paralympic Games, however it was neglected to be mentioned, much to the Brisbane MP's discontent. The ANCAP Budget also involved the introduction of a Negative Income Tax. So, what is a Negative Income Tax? Well, a Negative Income Tax, or NIT is an approach to taxation first floated in the 1940s by British politician Juliet Rhys-Williams, however, it didn't receive much political support till popularised by renowned capitalist, Milton Friedman, likely a figure well admired in the ANCAP party room. A Negative Income Tax is a proposal that flips the way tax is paid on incomes below a specific threshold, but ensures taxation on income above that threshold.

Milton Friedman, considered the face of the NIT

Take the ANCAP budget as our example here. The ANCAP budget implements a threshold of $37,000 for it's NIT. This means those earning below 37,000 will receive welfare from the government, and those above will be taxed. To what rate will the people below $37k receive the money? Well the budget outlines such a formula to calculate the amount to be recieved from the NIT. Using the principle that the closer to 37,000 you are, the less you will receive. The specific formula is (1-Income/37000)x18500. Let's see this in practice. Take Sally. Sally is a 19 year old part time employee. She earns $25,000 a year. Under the government's proposal, she will receive $6000. If Sally gets a promotion, she rises to $30,000 a year. She now receives $3500. This is the principle of Negative Income Taxation in theory, however it has been met with significant backlash.

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The move to NIT resulted in the ANCAP budget attempting to justify a 20% cut to the Department of Welfare, a funding decrease of $40 billion. While the Treasurer was quick to mention that payments aside from jobseeker and youth allowance won't be cut, there still remains an unexplained budget hole in welfare department funding. The Labour Party sought opposition to the budget and the tax cuts, arguing that they enrich the "top end of town" (/u/TheSensibleCentre, in her budget reply), and Labour leader, /u/model-jordology claimed that ANCAP "operate a dangerous administration" seeking to "downplay the severity of the budget miscalculations".

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So, what happened? Why didn't /u/model-pierogi vote? Well it's understood that while /u/model-pierogi had qualms with the budget, he sought to have the bills voted on "seriatim", which means splitting the annual appropriations, the general running of the government and the budget statement, the special appropriations, into separate bills. This ensures that supply is not blocked but the MP can express his dissatisfaction with perceived neglect from the government. /u/model-pierogi moved during the budget vote to have this occur, however the question of the bill being read a second time had to be resolved first, and it appears that model-pierogi made a mistake of forgetting to register his vote. Under standing order 132, if a division has "miscarried through misadventure" such as these circumstances, the vote can be re-held, but we shall wait and see if such a course is taken. This could enable the CLP to attend to the budget, and presumably join with the ALP to vote the budget down.

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model-pierogi moved to have the bills taken seriatim, but failed to cast the vote that would continue this process.

Finally, some interesting notes. This budget is one of the most swiftly introduced budgets in history, being delivered in the 2nd sitting of parliament, it is an impressive feat regardless of the result. Some governments have failed to introduce a budget, or done so with such little time remaining that it cannot mathematically pass. Secondly, this budget has been delivered with little prestige as previous ones, perhaps due to its prompt introduction. The Treasurer delivers the budget alongside an extensive, grandiose delivery, spruiking the various bells and whistles of the government's agenda. However this was not to be seen. In the debate before the house, /u/Cookie_Monster867 had no comment other than "What a fantastic budget, just fantastic. I love it. Will vote number 1 budget." Given this lacklustre speech and the erroneous nature of the budget, could a cabinet switch up be on the cards? Who's to say!

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Perhaps the Treasurer has other issues to attend to.

Overall, a headache for the government remains with this budget blunder. Will it be rectified? Crikey will watch and see, alongside all of you! Goodnight! :)

(M: Once again I am a tired soul writing this, if there's errors, let me know, I'll be happy to add corrections)