When it comes to being a treasurer, it is better to be good than lucky.
Peter Costello, through no skill of his own, presided over a period where each budget update would see a better figure projected and either a smaller deficit or a bigger surplus. Wayne Swan, through no fault of his own, presided over a period when the global financial crisis smashed the budget projections.
So Jim Chalmers will feel that he got a lucky Christmas present when the Myefo revealed a big jump in revenue compared with what was expected in the May budget. It means we will likely see another budget surplus.
Just over 60% of the $36.6bn increased revenue over the next two years comes from more company tax, mostly due to “higher-than-expected mining profits” because of higher commodity prices:
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And if you’re worried about all those mining companies having to pay more tax, be comforted that the projections for the petroleum resources rent tax (PRRT) have fallen. That company tax can rise but the PRRT falls tells you all you need to know about how badly designed the PRRT is and why gas companies are laughing.
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Over the next four years (including the current financial year) policy decisions since the May budget (whether to do with revenue or spending) are expected to reduce the budget balance by a cumulative $5.5bn.
On the other side of the ledger, parameter variations – changes in projections of economic growth, commodity prices, inflation and the like – have added a combined $44bn to the budget.
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So we’re all a lot richer, right?
Well, no.
Wednesday’s data was a good reminder that we probably spend too much time worrying about the budget and not enough about the actual economy.
Chalmers announced no new measures to relieve cost-of-living pressures and continued to suggest stage-three tax cuts are sacrosanct because I guess he is a Labor treasurer who all his life has hoped to preside over the introduction of a flat income tax scheme that gives people on $200,000 a 4.5% ($9,075) tax cut while those on $67,600 get a cut of just 0.8% ($565).
That number is important because on Wednesday as the treasurer was outlining the Myefo numbers, the Australian Bureau of Statistics announced that in August, the median weekly earnings was $1,300 – or $67,600 a year.
That means half of all workers earn less than that amount.
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The figures show that more than 80% of workers will not benefit from the stage-three tax cut’s removal of the 37% tax bracket that applies to those earning between $120,000 and $180,000. Even 75% of men earn less than $117,000.
If the median income was to rise at the rate it has the past decade, median-income earners will be on $120,000 in 18 years’ time in 2041.
So bracket creep is probably not all that front of mind for them.
What they might be thinking about is that while the median weekly earnings rose 4.2% to $1,300 from $1,248, last year inflation rose 5.4%. So in real terms, median earnings fell 1.1% or $15 a week.
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Not everyone did worse off – the national drop occurred mostly due to the fall in earnings of those in Western Australia, Victoria and the ACT.
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It is also always worth remembering that the median weekly earnings very much depend on what type of job you do, which industry and (alas) your gender.
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Men have much higher earnings across the board than women. It is only among part-time casual workers that men earn less than women.
The data also allows us to calculate the gender pay gap across various measures. The good news is it is falling, but the mean (or average) pay gap is the largest, because men are more likely to work in the highest-paying jobs that skew the average higher for them.
Interestingly the gender pay gap on a per-hour rate is lowest. This highlights that the issue of the pay gap is not just the amount women are paid relative to men, but the number of hours they work. If you are paid the same amount per hour but someone gets twice the hours you do, you are not really earning the “same amount”.
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For those years 12s receiving their results this week, I wish I could offer you some comfort, but the reality is that yes, your scores do matter, because your income will be very strongly linked to your level of education – 90% of workers with no qualification after high school earn less than $106,000 while 30% of those with a bachelors degree earn more than $109,000.
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These figures bring home the reality of who is doing well, who is finding their income going up by less than inflation, and most crucially of the government in the year ahead, who will benefit the most from the stage-three tax cuts. It is decidedly not the majority of workers, and very much not the ALP base.
Greg Jericho is a Guardian columnist and policy director at the Centre for Future Work
