Wayne Swan to give us his best Robin Hood

Gather round. I want to tell you a sad story.

It’s been a tough year for the rich. They haven’t had much reason to smile since about, oh, October 2007. Since then, they’ve faced an almighty beating from the stock market. (I haven’t seen a thrashing as memorable since one delivered by a Marist brother on a year 4 classmate.)

This market crash was so big, it led to multiple margin calls, which multiplied the damage. Simultaneously, in horror, they watched their superannuation balances shrink like a Twisties packet in the oven.

Trucking boss Lindsay Fox is reported to have offloaded his personal jet, while Australia’s richest man, James Packer, is selling his boat and pushing back delivery of a jet.

Next came job cuts, overweighted toward management. And now their expensive houses are crashing in price faster than everyone else’s.

Yep, it’s been a lousy year to be loaded. (Or, in some cases, previously loaded.) Sob, sob. Boo. Hoo.

So far it’s been accidental. Global market forces aimed at the unidentified (like Ronald Reagan’s “War on Drugs” in the 80s).

But now it’s about to get personal. (Subs note: Italics on ‘personal’, please)

The plan is pretty simple: Kevin has given Wayne a green light to give Mr and Mrs Moneybags a ‘kick in the goolies’.

And he’s going to do it on national TV! You can watch it on next week’s Budget. (Just like an episode of Australia’s Funniest Home Videos. In fact, you’ll have to give up Funniest Videos for the night to giggle along with the Treasurer.)

There’s nothing quite as Australian as “the tall poppy syndrome” and giving high flyers a kicking when they’re down.

“You have to look at what can be afforded by way of additional support from those who are better off,” said Kev recently, seemingly oblivious to how less “better off” the better off have become in the past 18 months.

Advance Australia Fair.

Next Tuesday night will be Wayne’s World (with Kev strumming his air guitar in the back of shot). The national balance sheet is in trouble and someone has to cop one for the country. You can’t apportion this responsibility evenly.

This Budget is actually more a straight Robin Hood exercise. Will Wayne emulate Errol Flynn, or Kevin Costner? Labor already have some form to read since their election, which includes:

• Means testing the baby bonus. For couples earning more than $150,000, “no baby bonus for you!”
• Means testing the Family Tax Benefit Part B.

The action we’re likely to get out of this Budget (if the smoke leaking from Parliament House is a fire), includes:

• Tax breaks associated with superannuation could be cut for the rich.
• Means testing to stop high earners claiming the 30 per cent private health insurance rebate.
• Reducing access to the government age pension.
• Means testing on the 50 per cent child-care rebate (a tough one, because it was a Labor election pledge).

What can the rich do about it? Not much. Their boys aren’t occupying the right seats in parliament. And it’s safe to say there won’t be a significant voter backlash.

For most Australians, there probably will be some pain in this Budget, although it sounds like pensioners will do well.

We’ve been buttered up to expect the cash bonuses for first home buyers will be reduced, but not removed. After carefully propping up house prices in the lower half for the past six months, the last thing this government will want to do is to then have them collapse.

Although first home buyers might see this reduction in “free cash” as a disaster, it is actually a good thing. The evidence clearly suggests that when you give people extra money as an incentive to buy a house, the effect is … the prices of houses are bid up by significantly more than the grant amount itself.

There’s a good chance that if the grants are reduced by, say, $7000-$10,000, the price of houses in the brackets that make up the first home owner market will fall by substantially more than that. It is probably good news!

So, for those who enjoy the perverse, a kick in the goolies and the potential for lower house prices could make Wayne’s second Budget a bit of fun.

My Budget money-saving tip? Just in case the rumours are true about wine taxes jumping, I’m off to the bottle shop!

Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and principal financial adviser with Castellan Financial Consulting. Contact Bruce: bruce@debtman.com.au