Sometimes political science can feel a bit removed from the reality of politics. But in election years, it’s good to be reminded that the median voter theorem really does hold. The further behind a government thinks it is, the more it is likely to present policies that are very similar to those of its opponents.¬[sgl dagger]Was there anything in tonight’s budget that you would have been flabbergasted to hear come from the mouth of a Labor Treasurer? I can’t think of much.

Two measures caught my eye, however. One was the private tutoring voucher provided to kids who fail to meet literacy and numeracy benchmarks. Despite its prevalence (tutoring high school kids was the way that I paid my way through university), there’s very little empirical evidence on the impact of private tutoring on test scores. For example, this UK review suggests pretty mixed results. I’m all in favour of giving more resources to help kids who are struggling to keep up with class - but I’d like more solid evidence that private tutors will be good value for money.

The second measure that caught my eye was simplified tax filing.

The Government will provide additional funding of $20 million in 2007-08 to enable the Australian Taxation Office (ATO) to pre-fill electronic tax returns for around nine million taxpayers, with effect from the 2007-08 income year.

The ATO will pre-fill electronic returns with information on:

• salary, wages and allowances, where the employer has lodged the employee[base ']Äôs payment summary electronically with the ATO;
• dividend and interest income and distributions from managed funds;
• payments from Centrelink, the Department of Education, Science and Technology and the Department of Veterans[base ']Äô Affairs;
• Medicare out-of-pocket expenses and private health insurance information; and
• Higher Education Contribution Scheme and Higher Education Loan Programme details.

Taxpayers with additional sources of income, such as rental income, capital gains or foreign-source income, will need to augment their returns with that information, as would individuals whose employer had not lodged payment summaries electronically with the ATO.

This measure will make completing income tax returns significantly easier for the 80¬[sgl dagger]per cent of individual taxpayers who use e-tax or lodge their returns through a tax agent.

I expect I had no impact on it, but I was rather pleased to see a reform that matches very closely something that I proposed in 2005 and 2007.

11:03:23 PM    

I was chatting with my colleague Bob Gregory about the budget today. Speaking with Bob is wonderful, since he always has something to say that’s a bit different from the punditry. This morning, he said “You know, it’s interesting. The public sector used to own assets like Qantas and the Commonwealth Bank. Then we sold them off. Now the public sector is buying up assets again, except now it’s purchasing a slice of the stockmarket. I don’t really know which is better - the government owning Qantas, or the government owning a whole variety of Australian companies via¬[sgl dagger]the Future Fund and the education endowment.”

10:59:50 PM