This is a deeply ideological budget. It rewards the Morrison government's friends, and punishes perceived enemies. #Budget2020

Tens of billions will be given to big business, and to high-income earners. Wealthy men will get the bulk of the benefit. The poor, the unemployed, women, and those working in sectors the government doesn’t ideologically favour will get little.

The centrepiece of the budget is a massive give-away to business. The Morrison government has rewarded its backers in the private sector with huge subsidies, in the form of asset write-offs and tax “carry-backs” (in other words, government hand-outs).

Most of this stimulus is almost pure transfer to investors, with big business likely to trouser the investment allowance and loss carry-back and give it straight to shareholders in higher dividends. The government hopes it will boost business confidence, but will it create jobs?

Meanwhile, the tax cuts mainly favour high-income earners. There is little justification for this. High-income earners have done very well out of the pandemic. Inflation is negative and many wealthy households are already finding little to spend their money on.

Perhaps there will be boom in luxury purchases, but it seems likely that the bulk of the tax cuts to high income earners will be saved. That won’t help aggregate demand. My colleagues at the Centre for Future Work show the problem, with this graph tracking personal savings:

At the other end of the spectrum, support is being withdrawn. JobKeeper ends in March. The JobSeeker supplement -- which has keeping people out of poverty -- will also end. Welfare payments will return to their former level well below Australia’s poverty line.

As Anglicare’s Kasy Chamber poinrted out, “instead of doing what needs to be done, this Budget gives handouts to people who don’t need them.”

This underscores a theme of the budget – punshing enemies. For those less favoured by the government’s ideological proclivities, the budget is a bust. There’s nothing meaningful in it for renewable energy, social services, for women, education, housing, or for childcare.

And yet despite all the handouts to business, unemployment will still be 6% in 2023! This is a recipe for long-term stagnation. /ends

Oh, and just on the huge savings high-income households are running up, as they struggle to spend their incomes - here's @davidfickling on exactly that https://www.bloomberg.com/opinion/articles/2020-10-06/australia-s-stimulus-should-be-targeted-at-lower-income-workers