Last night, the Federal Government brought down the – 2013-14 Budget – claiming it was a responsible response to the circumstances it faced (declining world growth, declining terms of trade and persistently high exchange rate) and that it emphasised growth and jobs. Neither claim is remotely correct. It is a pro-cyclical budget – that is, a contractionary budget that builds on the contractionary fiscal shift in 2012-13, which by its own arithmetic reduces growth and causes the unemployment rate to rise. It will damage employment growth and increase poverty rates. It reflects a failure to acknowledge the state of the economy (4 per cent output gap) and to implement the correct counter-cyclical fiscal response (a significant rise in the projected budget deficit). It might have some education and disability spending in it. But even in those areas the spending is inadequate and, in the case of education, based on a neo-liberal view that the federal government should be funding the private schools, which, in general, educate the children from wealthy and high-income families. Overall, a destructive fiscal plan given the state of the economy.