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No sweeteners, with a sour taste on horizon

Finance Minister Senator Penny Wong.

Finance Minister Senator Penny Wong. Photo: Alex Ellinghausen

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.

14 comments

  • possibly last budget - are you kidding me Ross Peake!! You lot in Canberra must be living fairy land with a statement like that - this won't only be his last budget, he will also be run out of town and hopefully lose his own seat, which is only fitting for his very poor tenure as Treasurer.

    Commenter
    Ian
    Date and time
    May 15, 2013, 7:42AM
    • Will be interesting to see the rapid decline of the over priced housing and land in Canberra, the good times for gov revenue and developer lotto wins is over. Allot of people will be disappointed and in a bad financial position

      Commenter
      TheJoker1214324
      Date and time
      May 15, 2013, 8:12AM
      • There is a degree of 'rough justice' here, considering that the ACT voters are so rusted on to Labor/Greens. Labor/Greens don't care about Canberra because they know ACT voters will hand them the seats, Liberal don't care because they know they can't win seats here. And all parties know that outside Canberra public service bashing will always be popular. Canberra is in a lose/lose situation. Come on ACT at least make the seats marginal and you may get some positive attention

        Commenter
        Irene
        Date and time
        May 15, 2013, 8:19AM
        • As much as voting for the Coalition irks me, I think you have a point Irene. As long as we roll over and take it, they'll never change how they treat us.

          Commenter
          That Guy
          Location
          Canberra
          Date and time
          May 15, 2013, 10:11AM
        • Irene, I agree with you about rusted to the Labor now Green cause and I have been one of those all my voting life as that was the way my birth area in Australia was brought up.
          But that is about to change, I will never vote Liberal but I certainly will not be voting Labor in September as I will never support ACT Green Labor again while they continue to treat many ACT residents as 2nd Class Citizens.
          When Mr McCullam was the north side ACT federal member he seemed more concerned about saving the world outside the Territory and now his parachuted replacement Mr Leigh is the same also finding the time to write a book in the process.
          But in Mr Leighs favour we must remember he was against the $50k pay rise granted the feds and only accepted it as he had no choice,

          Commenter
          NITRO GANGSTER
          Location
          ACT
          Date and time
          May 15, 2013, 10:41AM
      • What a dog act Wayne Swan, you and your party should be ashamed to take your next pay packet.
        You continue to ensure that your superannuation entitlements are better that everyone else, you have murdered the public service, taxed the mining industry to a standstill, taken away anything that will assist young families and still you bleat on about having a surplus by 2017.
        How about you focus instead on not putting people out of work, getting the long term dole bludgers back to work or off the dole and just be happy with budget neutral for a change.
        This game of one upmanship against the opposition parties has to stop before you permanently destroy OUR, not YOUR country.
        Tony Abbott take note, you can and in six months probably will have a chance to do better, you just have to remember to do what is actually the right thing, rather than what is politically right.

        Commenter
        Concerned
        Location
        Canberra
        Date and time
        May 15, 2013, 8:40AM
        • Hey concerned, dog's are loyal, use a different term

          Commenter
          TheJoker1214324
          Date and time
          May 15, 2013, 9:13AM
        • Concerned please, Dogs are masters of unconditional love.

          Commenter
          NITRO GANGSTER
          Location
          ACT
          Date and time
          May 15, 2013, 11:22AM
      • Does anyone not find the most disturbing thing of this budget is the cuts to programs to address climate change which is running away from us at present. If we had any chance to avoid the worst effects it needed to be addressed yesterday. Humans really are short sighted, and, will always rationalise economic considerations above the ecosystem that supports the economy in the first place. Totally Bizarre.

        Commenter
        benjamin.garden1
        Location
        Campbell
        Date and time
        May 15, 2013, 9:01AM
        • In the current environment no one really cares when your own job is at risk - mine is, and at the moment I couldn't care less about climate change - I suspect yours is safe?

          Commenter
          Ian
          Location
          ACT
          Date and time
          May 15, 2013, 12:08PM

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