By figuring out who got what piece of the excess revenue that was generated by lower unemployment and the China-led resources boom since 2004, we get a better idea of the reform hurdles ahead for the Rudd Government. Assuming that no government will want to take money off people, how do you fix a system that is, in many respects, overly generous?

The mixed result in the analysis of Australia’s tax and handout system shows how much further the Rudd Government has to go in order to achieve its stated goal of a simpler, fairer and more jobs-friendly regime. The analysis shows that 97,000 families in the top half of the income ladder lost family payments because of the budget. However, the clawback was offset by 53,000 new family payment recipients coming from the bottom half of the ladder, due to other tax changes.

While Senator McCain has not called for a full privatization of Social Security, he has supported the concept of allowing individuals to invest part of their payroll taxes in stock and bonds. But the idea has taken on a new air of political vulnerability because of the upheaval on Wall Street, which Senator Obama has sought to seize on.

The Rudd Government is concerned that taxpayer-funded relief from the Exceptional Circumstances scheme is being collected by farmers who had saved money in Farm Management Deposit accounts. The accounts, introduced by the Howard government, give farmers tax breaks if they put money aside in good times ready for later use.

The income-tax-free club now covers 42.2 per cent of the nation’s 9.754 million families. But middle earners just outside the tax-free zone are caught in a new personal tax pincer, with 134,000 breadwinners being pushed up the scales from 30c to 40c despite Labor claiming it would “increase the take-home pay of all taxpayers”.

Opposition Leader Brendan Nelson will shortly announce a $30-a-week increase to the singles rate for pensioners and a bonus payment of about $500 a year to be paid shortly. The Coalition is trying to capitalise as the Rudd Government ties itself in knots by conceding pensioners can’t live on what they are paid now. The Coalition resisted pressure to lift the pension rate in the dying days of the Howard government - including rejecting a push by then minister Mal Brough.

More and more Swedish prostitutes want to pay taxes in order to receive the social welfare benefits that come with doing so. Income recorded on prostitutes’ tax returns gives them the right to sick-leave pay, parental leave benefits, and a pension.

The Labor-commissioned review of the Howard government’s work-for-welfare reforms also calls for single parents looking after a disabled child to be elevated to a $38-a-week higher pension payment. Under the current welfare-to-work rules, single parents are forced off the pension and on to the dole to look for work when their youngest child turns eight. The report recommends this should be changed so parents can do some training to get better jobs.

The Rudd Government has acted in response to serious labour shortages in horticulture and the inability to fill these vacancies from the domestic market. Its decision to import temporary workers from the Pacific islands follows a three-year campaign by the National Farmers Federation and a five-year campaign by the South Pacific nations.

Wayne Swan and Kevin Rudd can no longer blame their predecessors for all of Australia’s mounting economic ills. And they know it. Whether or not the banks pass on next month’s anticipated official rates cut, you can be sure our new leaders will say that the Reserve Bank’s decision stemmed directly from their actions as brave inflation fighters.