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Sacred surplus could be dumped

Clues in the mid-year budget statement suggests the government is running out of programs to cut and might yet dump its prized budget surplus.

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We go through this screaming match every time the government announces budget cuts, but it seems more hysterical than usual this time.

Manager of opposition business Christopher Pyne reckons it is "vicious and savage" for the government to give every family $3000 when they have a second or subsequent child, rather than the $5000 they get for their firstborn. We all know children are expensive and anyone would prefer five grand to three, but a $3000 cheque from the government is the kind of "vicious and savage" most people can live with.

(It was apparently not "vicious and savage" when the Coalition voted against the Schoolkids Bonus - $410 for primary school students, $820 for high school students — on the grounds that it did not have to be spent on children; of course, the baby bonus does not have to be spent on children either.)

Tony Abbott and Joe Hockey respond to the budget update at Parliament House in Canberra.

Tony Abbott and Joe Hockey respond to the budget update at Parliament House in Canberra. Photo: Andrew Meares

Shadow treasurer Joe Hockey likens the reduction in the baby bonus to China's one-child policy. Seriously. He argues that getting $3000, rather than $5000, for a second child is in some way similar to draconian laws that take away the right to determine the size of your own family.

Families spokesman Kevin Andrews seems to argue it could reduce Australia's fertility rate to dangerous, productivity-harming levels.

Studies have put the cost of raising a child at several hundred thousand dollars but, according to Mr Andrews, that $2000 reduction is going to make a decisive difference in families' decisions about having another baby.

And Coalition leader Tony Abbott said "[often] one child is still in the cot when the other one comes along, one child is still in the pram when the second one comes along, so you actually need to get an extra cot or a double-sized pram". He added that Labor may not have known this because of its "inexperience" with children.

Putting aside what he was actually getting at with the "inexperience" gibe, most people with experience of buying cots and double prams know that unless you go for the Rolls-Royce models, $3000 ought to cover it.

Of course oppositions will bag measures that take things away from voters. Of course families would prefer to keep getting the higher level of payment. But listening to the latest round of hyperbole it is important to bear a few things in mind.

First, when previous hyperbolic reactions have died down, the Coalition has often quietly voted the measures through.

It originally described the freezing of thresholds for family benefit eligibility as "class warfare", but then waved it through.

And former Liberal leader Brendan Nelson initially opposed the original baby bonus means test (because rich mums loved their babies too), but in the end the Coalition also gave up that fight.

One reason for the previous decisions has been that the Coalition knows in government it will face the same structural budget problems that the government is facing now - and will have to consider equally difficult and unpopular savings measures.

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