Australia's budget proposals: popular despite some pain

AUSTRALIA'S ruling National-Liberal Party coalition led by Malcolm Turnbull has been enjoying a modest bounce in the opinion polls following budget proposals handed down recently.

In a way, the political support for the budget is quite remarkable because it actually increases certain taxes on the ordinary voter. For instance, the levy for the universal health care system is set to rise by 0.5 percentage point - from 2 to 2.5 per cent of taxable income - to pay for a disability insurance scheme. The budget also increases fees for university students and repayments of government-funded student loans will come due at a much lower threshold than the current A$55,000 (S$56,855) in annual income.

So why is it popular? To begin with, it is seen as a non-ideological budget. Past conservative governments were noted for their efforts to shrink the state. None has ever really succeeded. In this budget, Mr Turnbull is seen extending the reach of the state with his crackdown on the big banks, for instance. He is also perceived to be showing that his government can be tough on the peak capitalist institutions. A new tax is to be imposed on the major banks from July 1 which will be on top of all the other taxes that corporations have to pay. In addition, the big banks are also facing new rules on issuance of credit cards. Worse for them, there is to be a new statutory authority to help consumers with complaints about banking practices. The last measure is probably to forestall the opposition Australian Labour Party's call for an official inquiry into the banking industry - with powers to summon witnesses and examine internal records and correspondence.