Labor gets set for poll
Poll: Are you happy with this federal budget?
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Poll closed 9 May, 2012
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THAT this was no ordinary budget was clear five hours before Wayne Swan stood at the dispatch box at 7.30 last night and announced that Labor was delivering its promised surplus ''on time, as promised and ahead of every major economy''.
Usually, question time on budget day is a strictly go-through-the-motions affair, prosecuted without passion before a near empty press gallery as the media heavyweights are in the budget lock-up, combing through piles of paper, looking for sums that don't add up.
Yesterday was different. More than 30 reporters and commentators delayed their entry to the lock-up to witness an opposition attempt to exploit what Christopher Pyne called a ''morass of the Prime Minister's making''. It ended with a tied vote and with disgruntled independent Andrew Wilkie voting with the Coalition.
But even before the Peter Slipper and Craig Thomson controversies threatened to completely overshadow it, Swan's fifth budget seemed destined to be his most infamous - billed as the toughest in a generation and framed in the most toxic political environment in almost half a century.
Not since the first of Peter Costello's 11 budgets had such extensive spending cuts been imposed in a single year. The difference, of course, is that Costello's cuts came in the first year of a new political cycle, when the Howard government was fresh and new, and enjoyed the public's confidence.
Not since Bill Hayden's first (and only) budget in 1975 has a budget been brought down in a climate of such entrenched hostility to the mob in power. Four months later, the Whitlam government was swept from office.
Against this testing backdrop, Swan has produced a clever and ambitious budget that aims to restore the faith of Labor's jaded core constituency while reasserting its credentials as an economic manager.
Budget night is an opportunity for the Treasurer to tell a story and the truth of it is that Swan does have a good story to tell - solid economic growth, low unemployment, and official interest rates, and taxes as a proportion of the economy that are lower than during the Howard years.
The centrepiece - returning the budget to surplus - was promised before the 2010 election and confirmed on budget eve, presumably to give Craig Thomson competition for the front page of yesterday's broadsheets. This was one promise that wasn't going to be broken.
Swan's argument for sticking with the promise, despite the more challenging economic environment, is appealing - that the surplus maximises the prospect of further interest rate cuts, which represent the best relief to those sections of the economy most under the pump, especially in manufacturing and tourism.
The danger is that the $17 billion in net savings will stifle growth and cost jobs, but Swan has minimised it by cutting most in areas where the money would have gone offshore, in defence and in foreign aid (though decisions to cut or defer spending in both areas will be seen as breaking commitments). He has also found money to spend on the most vulnerable.
The most audacious call is to ''redirect'' to families the company tax cuts that were to be funded by the mining tax, on the grounds that they wouldn't happen because Tony Abbott would defeat them in the Parliament. It could represent a win-win. Business will be ropeable, but Swan says their anger should be directed at Abbott. And families worried about the carbon tax suddenly have more relief in sight.
While Swan claims his budget ''delivers'' the surplus, this is not quite right. It won't be delivered until the figures come in at the end of next year. And there are other question marks.
Will the growth forecasts be accurate? Will the Reserve Bank deliver more interest rate relief? Will the crossbenchers oppose some measures? Will the miners keep spending? How big and damaging will be the backlash from business?
The biggest question is whether this budget will represent the start of a fightback - one that will give Labor MPs some confidence that Julia Gillard will, in her words, deal with and ''conquer'' the challenges in front of her; one that might bring at least a pause to incessant leadership speculation.
Here, the best that can be said is that the budget gives Gillard and Swan something to work with - a bribe that might halt the drift of blue-collar workers to Abbott and an economic strategy that might be seen as credible by the middle ground.
The message from recent history, however, is that budgets of themselves rarely recast the political landscape. Good news is quickly forgotten and bad news is amplified by those who are disadvantaged, especially if they have big pockets.
There is also the likelihood that the Slipper and Thomson affairs will continue to demand the spotlight, and the risk that another own goal is just around the corner. As one pessimistic MP remarked last night: ''Even when we do something right, there has got to be something wrong with it.''
But, if one of Gillard's biggest faults so far has been an inability to foresee danger - with the seduction of Slipper and standing by Thomson being just two recent examples - the strength of this budget is that it is focused squarely on positioning Labor to fight an election in the second half of next year.
If it inspires confidence in the Labor caucus, it will be heavily qualified. The more likely reaction is relief from MPs that, in the face of deeply entrenched antagonism and cynicism, the PM and her Treasurer are having a crack.