Dignity in the numbers: Hartcher
The government has resisted the urge for a cash splash ahead of the September election, showing dignity in the face of continued poor polling says political editor Perter Hartcher.PT4M17S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2jklm 620 349 May 14, 2013
The opening sentence of Wayne Swan's budget speech last year was so charged with chutzpah that it invited guffaws of derision from Coalition MPs the moment he uttered it. ''The four surpluses I announce tonight are a powerful endorsement of the strength of our economy, resilience of our people, and success of our policies,'' he said.
Illustration: Bruce Petty.
The opening of this year's speech was altogether more circumspect, less declaratory and even chastened. ''Tonight this Labor government makes the choice to keep our economy strong and invest in our future to support jobs and growth in an uncertain world ... ''
Usually, election budgets are viewed in isolation and are replete with giveaways. This one is joined at the hip to the one that spent money it didn't yet have, and failed to anticipate the second-biggest revenue write-down since the Great Depression. But it's an election budget just the same.
This is not a give-away budget, but its purpose is to force Tony Abbott to nominate what he will take away. It's about the choices Wayne Swan and Julia Gillard have made - and the choices Tony Abbott and Joe Hockey will have to make.
Will they restore the baby bonus, and if they will, how will they fund it? Will they reverse the decision to spend $3 billion on public transport in Melbourne (and upset a host of commuters in marginal seats)? Will they deny NSW billions in funding to improve schools (and give Labor ammunition in the state where it faces a wipe-out)?
Ultimately, it's about the choice the voters will make on September 14.
Indeed, this is not so much a budget as an election battle plan. No wonder Abbott was wary of booby traps.
Aside from wedging the Coalition, the aim is to rekindle the credibility lost by charting a sensible ''pathway'' back to surplus and identifying some $43 billion in savings that will pay for the big-ticket Labor reforms to school funding and disability insurance.
The budget handed down on Tuesday makes a commendable start, but it is hard to overstate the self-imposed degree of difficulty.
On the one hand, Swan is confident he has a good story to tell and, when it comes to the macro economy and the rest of the world, the evidence is there to support him.
An unemployment rate of 5.5 per cent, gross domestic product tipped to be 3 per cent next financial year and inflation under control are not contested - and are broadly in line with last year's forecasts (though GDP this year is a little less than what was predicted).
The most impressive chart Swan cited in the budget lock-up was one showing that, by 2015, the Australian economy will have grown by 22 per cent since the global financial crisis.
The equivalent figure is 9 per cent for the United States and 2 per cent for Japan, while Europe will be yet to enter positive territory.
On the other hand, the problem for Labor is that credibility is earned by what you do, not what you say you are going to do, and even Labor's successes tend to be sullied by declarations it didn't have to make, and were generally driven by poor political judgment.
''There will be no carbon tax,'' is the stand-out example, but DisabilityCare is also a case in point. Along with the plan to improve school funding, it is the centrepiece of what, almost certainly, is Labor's swansong budget. Both policies were crafted after thorough reviews, meaningful consultations and painstaking deliberation.
But what should be Labor's finest example of world best-practice in policy formulation is weakened because the Prime Minister ruled out an increase in the Medicare levy to pay for the national disability insurance scheme until the scale of the revenue black hole became apparent - when this was always the most logical and sensible approach to take.
Thanks to the plethora of unequivocal declarations in last year's speech (like ''meandering back to surplus would compound the pressures in our economy and push up the cost of living for pensioners and working people''), the credibility gap is even greater when it comes to this year's pledge to balance the budget by 2015-16 and return a very modest surplus the following year.
The irony is that it was apprehension about Abbott's ability to wound the government that goaded Gillard and Swan into making the very declarations that have eroded public trust because they didn't come to pass - and will now be exploited ruthlessly, relentlessly, by the Coalition.
The Opposition Leader gave a taste of his post-budget attack in question time, when he questioned how 10-year funding commitments on DisabilityCare and school funding could be taken seriously (citing Swan as an authority) and asked if the Prime Minister intended apologising for the broken surplus promise.
Indeed, so toxic are the politics that speaker Anna Burke took the unusual step when Parliament resumed on Tuesday of warning MPs on both sides that she will take a zero tolerance attitude to those who would interrupt Swan's televised budget speech or Abbott's reply on Thursday.
Aside from an opposition that can already taste victory, Labor faces an increasingly hostile business community - whose disaffection will have only increased by plans to reap $4 billion by ''closing loopholes in the corporate tax system'' - and an electorate that has stopped listening.
Will this budget transform the contest? Hardly.
Does it give Gillard a foundation to wage a campaign? Yes, it does. Will it instil confidence into a caucus that is bracing itself for a crushing defeat? This is doubtful.
The lesson from last year's budget is that the real test of how this one stacks up will be in 12 months time, by which time a new treasurer expects to be in the chair - and blaming Labor's poor management for the tough calls he has to make.