Sunday Times Editorial: Beware Budget season gifts

It is Budget season.

State Treasurer Rita Saffioti will hand down the 2026-27 WA Budget on Thursday, and Federal Treasurer Jim Chalmers will follow up on May 12.

Modern Budgets feel very removed from the days when the documents were tightly guarded secrets which dropped with a wham on Budget day.

In these times, when political spin is being elevated to ever-increased levels, there are a few tricks to the Budget trade.

Budgets can be unwieldy documents so one method which can help ensure none of the perceived good news gets missed is to have the small army of staffers get to work pumping out announcements leading in to Budget day.

They can also be handy diversions if the news of the day is not favourable.

The State Government has been hard on work on this front.

Housing and health have been the focus of a flurry of announcements so far along with some teasing on targeted cost-of-living relief with the revival of previously popular power bill credits considered unlikely.

Another tactic is to float ideas that ministers are keen to adopt but fear might provoke some backlash.

So to test the waters the idea that something is under consideration might mysteriously find its way into the media, which may then run it up the flagpole.

If there is a major backlash the idea might be quietly killed off.

If not then you can expect to see the policy emerge in some form in the Budget papers.

Such is the case with the Federal Government and flagged changes to the Capital Gains Tax and negative gearing.

Any suggestion of dumping or gutting them was seen as electoral poison not so long ago.

But now soaring house prices have been making it ever more difficult for first-homebuyers to get a toe on the property ladder.

So the ideas have been dug up, reheated and presented as a way to deliver intergenerational equity.

And the backlash has been less than perhaps Federal Treasurer Jim Chalmers was expecting would be the case.

So it seems like a done deal.

Some form of crackdown in those areas can be expected on May 12.

One fly in the ointment for both State and Federal Treasurers is that there has been a growing chorus of economists who have argued government spending has been a key contributor to driving up inflation.

They say this was a problem before the oil price shock from the Iran war started to feed through to the data.

And even Reserve Bank of Australia Governor Michele Bullock has linked government spending to the inflation dragon.

And it is the bank’s battle to tame inflation which has led to it hiking interest rates to cool things down.

Those economists are likely to be hoping for words like “spending restraint” and “Budget repair” when the Budget documents land.

And scanning those colour-coded graphs so beloved of treasury boffins to see how many are coloured red for debt.