ACT News


No sweeteners, with a sour taste on horizon

Wayne Swan's sixth - and possibly last - budget will lean on Canberra families while urging them to put the national interest first.

With the theme of ''stronger, smarter, fairer'', he spends on Labor's signature policies, putting in place ''permanent'' funding streams, even as government revenue crumbles.

Labor needs voters to see it as responsible if it is to influence polls, however - with no election sweeteners, the budget could soon be forgotten as campaigning intensifies.

And that highlights the bigger worry for Canberra: a post-election budget that could rock the city's economy.

So, if this budget pushes Canberra's population towards the gunwale - and it could have been worse - it may be the Coalition that jettisons them overboard.

ACT Chief Minister Katy Gallagher has good reason to worry about a catastrophic post-election landscape that is blighted by massive cuts to the public sector and possibly repeats the post-1996 election scenario that put Canberra into reverse gear when the rest of the country was doing OK.


Just as there is a widespread feeling Labor will lose the election, similarly there is a widespread expectation the Coalition will make deeper cuts than currently advertised.

Last year's budget foreshadowed cuts of about 4200 civilian public sector jobs, of which about half that number was achieved.

The Coalition's upfront plan to cut 12,000 public service jobs is providing the platform for Labor to examine the money - and votes in the rest of the country - to be gained by cutting further into the public sector, with senior managers in the firing line.

The Canberra economy can expect a period of uncertainty and probable slowdown as this budget bites and more as the city prepares for a likely change of government.

The scenario unfolded by Swan in Parliament for the forthcoming financial year presents several blows to the ACT: paid parking for the thousands of workers in the parliamentary triangle; the loss of more public service jobs despite the return to a lower efficiency dividend, as promised, with a focus on reducing the ranks of mostly Canberra staff earning more than $100,000; the end of the baby bonus; and less money for universities.

As a university city, Canberra is going to be affected as the government rips $2.3 billion from Australian universities.

Yet Swan's speech to Parliament was heavily focused on the theme of ''building a smarter nation''.

He reminded voters Labor has funded an extra 189,000 uni students during its term. But so-called ''smart'' voters will undoubtedly question the bizarre situation where money is taken from university students to give to school students. Scrapping or delaying a jet fighter or three would make much more sense.

The Gonski funding of $9.8 billion will ''transform our schools'' but the ACT's relatively well-resourced schools can expect little top-up cash and, in any case, the plan is still to be signed off by all chief ministers and premiers.

The budget delivers on Labor's signature policy, the long-awaited disability insurance scheme, with polls suggesting many Australians are happy to contribute a bit extra.

But their overall take of this budget is likely to be laced with scepticism.

The last revenue forecasts were crazy brave or wrong - or doomed by unexpected events. Now, no matter how much Swan protests, the surplus issue was taken out of his hands, unexpectedly, and the Coalition has another example of a ''broken promise'' to erode Labor's credibility.

Swan's fluidity in going from four-year to decade-long plans for funding may only increase the scepticism.


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