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Trust deficit spells death for a salesman

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Budget 2014: where the pain hits

Almost no-one's hip pocket is untouched by Joe Hockey's budget, explains Matt Wade.

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Treasurer Joe Hockey describes this as "the budget that gets on with the job" of repairing a budget which was otherwise headed towards the rocks.

Yet the real job for the new Treasurer begins now, with what looks to be one of the more difficult sales jobs any treasurer has given himself in years.

Indeed, he will now need to "get on with the job" not just of selling his budget but, crucially, of rebuilding the Coalition's relationship with voters. And he will need to start that task by salving some anger on the Coalition's own backbench.


As the hardworking Treasurer will be all too aware, balancing the books has been made doubly difficult by the constraints arising from a litany of unnecessary promises made by his leader Tony Abbott in the years leading up to the 2013 election.

Despite alarmist rhetoric warning of a budget emergency, an economic crisis, and a debt and deficit disaster, those promises effectively locked up about two-thirds of the budget by quarantining not just defence - a Coalition favourite - but the other big ticket items as well.

Quite deliberately, the pledges were delivered in consumer-friendly Abbott-ese, which is to say simply, clearly and often.

Voters remember them and so do Liberal MPs: no cuts to health, no cuts to education, no changes to pensions, no changes to the GST and no cuts to the ABC and SBS.

All were seen as likely Coalition targets if spending was to be trimmed. They were made expressly to kill off a Labor-Greens charge that "cuts to the bone" were coming under an intensely ideological Coalition government.

Voters will form their own views on whether that claim had merit. Few will welcome the individual measures where they are negatively affected. But that may change over time if the economy genuinely improves.

The government is to be commended for taking on a difficult task and for embracing both the opportunity and the responsibility of government to undertake reforms that may be initially unpopular but also necessary.

Much has been written about Abbott's promises, drawing the obvious parallel with Julia Gillard, who Abbott himself so effectively dispatched on the central question of trust.

Amazingly, Abbott now finds himself in the same boat.

It is hard to overstate the problem of trust created by this budget. The government's justification that the situation demands such medicine will be a bitter pill for many to swallow.

Consider Abbott's words just weeks before an election in which he was already sailing to victory. During one of a million election doorstops a reporter asked him: "The condition of the budget will not be an excuse for breaking promises?"

"Exactly right" the punchy opposition leader fired back. "We will keep our commitments that we make …" he went on to say for the umpteenth time in the campaign.

There were dozens of iterations of these commitments, many of them specific to particular areas, such as when Coalition figures were asked about a possible Medicare co-payment, which was generally ruled out.

Hockey will no doubt prove a better salesman than Wayne Swan did for Labor, who managed to go backwards even while handing out billions and saving the country from a global economic meltdown.

But he will need to be.

On his side is that the budget does some of the things governments should have done a long time ago. Restoring the indexation of fuel excise is one such measure because it protects a revenue stream that was otherwise dwindling.

But sensible as it is, the decision represents a broken promise.

And it is just one of many.

Hockey's belated argument is that the main promise was to fix the budget.

This is nonsense. As the quote from Abbott above makes transparent, clear-cut promises of no cuts to key areas were made in the context of the overall budget situation.

Justified as many of the structural savings announced in this budget are, there is no getting around the trust deficit Hockey and Abbott have just added to.

It's going to be a big job indeed.


  • This budget is fraud and doesn't even get the budget back to surplus at all!
    The money from the savage cuts and new taxes that Tony Abbott LIED about not introducing has all been given away to his mates in mining and big business.

    Treasury's PEFO last September had the budget returning to surplus in 2016/17 that's BEFORE Hockey's projections. The government has ripped the heart and soul out of this country for no reason – lied to the people over and over and forced this ideological con-job upon us.

    Think Big
    Date and time
    May 14, 2014, 7:22AM
    • Julia and the ALP weren't ousted because of broken promises. They were voted out because they were a shambles and could not be trusted to manage the country, and after 6 years of defecits we decided to hand the reins to the Libs. The Libs are now doing the job that the ALP couldn't. Please stop trying to make the last election about broken wasn't.

      Date and time
      May 14, 2014, 8:23AM
    • This is an "ILLEGITIMATE GOVERNMENT" by their own standard.
      An election must be called now so that that Australians can decide on these cuts, just as they demanded of Gillard.

      Got what you voted for
      Date and time
      May 14, 2014, 8:28AM
    • Hear hear......there could be numerous ways to get the budget bottom line back to balance again but this lot have (true to their neocon genes) have done the ultimate regressive budget, hurting and punishing those who are not rich now and forcing them into true poverty over the next 20 years of retirement. All can be reverted in 2 years is not set in concrete......just vote them out next election.

      Date and time
      May 14, 2014, 8:29AM
    • yes, dave ...but it will be only three years of shambles under the biggest and most deliberate liar of all time.

      Date and time
      May 14, 2014, 8:33AM
    • Hi Dave - when you say We - speak for yourself

      Date and time
      May 14, 2014, 8:33AM
    • Oh Dave - the Liberals are still giving us deficits and for longer than Treasury's projections in PEFO. Do you actually understand numbers?

      Labor were voted out because of Tony Abbott's four year long lie-campaign that was backed up by much of the commercial media. Now he is exposed as the most dishonest PM this country has ever seen.

      Think Big
      Date and time
      May 14, 2014, 8:35AM
    • Hey Dave......can you figure out now why the independents backed Julia Gillard over Tony Abbott to form a minority govt?.......Abbott hasn't got even a sliver of integrity in him....he is just one of those conmen who should appear on TodayTonight in a story of ripping off people...........Alan Wilkie said before the election he wouldn't touch Tony Abbott with a barge pole.......I guess we all know now what Alan knew back then......

      Date and time
      May 14, 2014, 9:00AM
    • Action should be taken to reduce the deficit even if it is 4-5 times LESS than most western countries that went the austerity route post GFC. My issue with this budget is HOW and WHO it is targeting. It’s basically an austerity budget targeting the low wage earners with a token debt levy and an even more token political wage freeze.

      Conservative thinkers believe there are examples of successful economic outcomes when the policies are aimed at making the poor poorer whilst benefiting the already rich and big business. Policies that pretend to be about better economic outcomes but are so shallow in their thinking and long term deliver the opposite. Charging for doctor’s visits saves some money, but then we pay more down the track for the cost of all of the ‘missed’ diagnosis. Turning universities into profit centres rather than education centres – long term those institution might turn bigger profit but our country denies the opportunity to extract the infinitely more valuable intellectual value from our countries minds. etc etc

      This budget could have been achieved with cuts to negative gearing, super contribution tax breaks for the wealthy, ending corporate welfare to miners and banks, keeping the debt levy (which is just rolling back some of Howard’s middle class election bribes anyway) etc. But no, Abbott is where he is by promising to do the bidding of big business, so no pain or heavy lifting for them.

      Date and time
      May 14, 2014, 9:05AM
    • A sleight of hand by the biggest snake oil sales team of them all.

      Abbott reckons that "no govt has taxed themselves to prosperity" but that is exactly what he's trying to do...

      The so called medical research fund will only receive $275 million from the $10 billion per year that is being raised by the medicare co-payment... so it'll take ten years before the fund will have any benefit. This also flies in the face of his not funding private enterprise....- it won't be the govt undertaking the research because the hypocrite has cut the guts out of the CSIRO (is that a contradiction?).

      The ideology of the federal LNP has cost shifted $80 billion to the states and effectively washed their hands of support to the states.

      Forget skills in Australia who would want to be an apprentice on less than $10 an hour and having to take out a loan to support yourself - this is far different from normal study because when you work and have to go to your job and support yourself your expenses are far higher.

      Just a bunch of fundamentalist dolts who want to turn Australia into the same dog eat dog society that is the USA. I hope Joe enjoys his cigars today..... he has left a bitter taste in many people's mouths.

      North Coast NSW
      Date and time
      May 14, 2014, 9:09AM

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