Swan's surplus an electoral albatross
If federal Treasurer Wayne Swan felt any unease about announcing an extra $16.4 billion of budget savings over the next four years - on top of a long list of other austerity measures designed to post a budget surplus in 2012-13 - he gave no indication of it yesterday. Mr Swan said the new measures, announced as part of the government's mid-year economic and fiscal outlook (MYEFO), were necessary because a lower global growth outlook had reduced taxation revenues and made it harder to deliver a surplus.
If Mr Swan's reading of the impact on Australia of a weakened global economy is sound, the same cannot be said of the government's goal of a budget surplus at all costs. Several economists have questioned the wisdom of pursuing a surplus at this point in the economic cycle, while others have pointed out its size (which was estimated at $1.5 billion when the budget was handed down in May, but has now been reduced to $1.1 billion) is such that it has symbolic value only. Yet others have suggested the figure is the result of conjuring and is thus meaningless in any real fiscal sense.
Mr Swan's assertion that the savings ''send a very clear message to the world that we have world-beating public finances [which are] very important given global economic uncertainty'' has been a refrain of his rhetoric about the desirability of a budget surplus. But delivering the promise is requiring ever greater turns of the rack. The reduction in the baby bonus from $5000 to $3000 for second and subsequent children from mid-2013 is the one measure that has the greatest potential to alienate voters, and the ranks of disaffected voters could rise further as a result of proposals to reduce private health insurance rebates. Nor is the big end of town likely to be happy at the new requirement for corporations to pay company tax monthly rather than quarterly.
The government will be hoping that further reductions in official interest rates will improve the electorate's mood, but this may be a forlorn prospect if predictions hold true that the Reserve Bank will delay any further easing of monetary policy until December. Mr Swan may also take comfort from the latest forecast for unemployment, which remains unchanged at 5.5 per cent, even as he laments the blowout in the costs of dealing with asylum seekers this year to $1.1 billion.
However, the dependence of Australia's finances on volatile commodity prices - and the fragility of fiscal outlook as a whole - must be major concerns for the Treasurer. In the final analysis, Mr Swan's fixation with a return to a budget surplus is no more than a political tactic intended to bolster Labor's credentials as responsible economic managers. To jettison this goal now would be politically disastrous for Labor, yet that is what the government is flirting with as it finds new ways to tighten the screws.
Canberra voters who fronted up at their local polling booths on Saturday may have been surprised to be greeted by electoral workers armed not with pencils, erasers and rulers but computers. Using laptops, polling place staff were quickly able to verify voters' bona fides before handing them their ballot papers. Voters who turned up at the ACT's half-dozen town centre polling places were also required to register an electronic vote using a barcode reader and a computer screen instead of casting a ballot the time-honoured way with pencil and paper. The process of voting electronically proved to be relatively straight forward and trouble free for most electors, with step-by-step instructions provided and electoral staff on hand to answer queries. Of course, we will never know how many younger and first-time voters initially used their fingers to swipe at the screen instead of tapping the old-fashioned keypad.
The slow adoption of electronic voting in Australia is difficult to fathom given the productivity improvements that computers have brought elsewhere. With a complex electoral system in which it can take many days to identify successful candidates for office, the ACT appears tailor made for electronic voting. If the ACT Electoral Commission can ensure that electronic voting becomes a feature of all polling places - and there seems to be no reason it cannot - the final results of the 2016 election ought to be known far quicker than has been the case in the past.