Built on good fortune, relying on luck

Federal government Budget Australia

Scott Morrison was all smiles as he handed down his pre-election budget on Tuesday night. Economic good times — at least compared to forecasts — allowed him to announce income tax cuts and an early return to surplus while making very few difficult spending decisions. But the new medium-term target of capping taxes as a share of the economy will only be achievable with superhuman spending restraint: and both history and demographic forces will be against him.

For the first time in years, a federal treasurer has had some luck in the lead-up to the budget. Over almost a decade, tax revenues have repeatedly fallen short of forecasts. But this year, tax receipts have exceeded expectations.

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