Tips for a more discerning budget night

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Money bagsThis evening's Budget is a major political event, perhaps the biggest one of the year. But, like all budgets, the whole package (the Treasurer's speech plus the accompanying papers) is so big that it is difficult for anyone to get their head around it. As a consequence, many of us latch on to relatively trivial details. Here are some points to aid your thinking as you are watching tonight.

The Budget normally condenses a whole year's politics into a single document. In the case of the Rudd Government it is less than six months. It is the culmination of months of hard work and argument by ministers, public servants, pressure groups and lobbyists. The final decisions are taken by Cabinet.

It is one of the most important markers of the year because it is a major parliamentary set piece between the Government and the Opposition. In a non-election year like 2008 it is probably the most important marker of all.

Any budget is about trade-offs and choices between available spending and taxing options. There are inevitably winners and losers; those who will be pleasantly surprised by the outcome and those who will be bitterly disappointed.

A first-year budget in a three-year electoral cycle is the best opportunity that any government has to produce a mean, tough budget full of cuts to spending and rebuffs to sectional interests. A government can give out goodies and election bribes in years two and three.

A budget is a particular challenge for a Labor government seeking respectability, given popular skepticism about the party's economic credentials. It must meet the expectations of the business community and the financial press while not disappointing its traditional supporters too much.

The Budget is a technical document, hard for any amateur to decipher. Even the professionals need time to digest its details; hence the media lock-up where journalists and pressure groups are given a head start over the rest of us to give them more time before they are asked to comment. Be aware of the distinction between new money being made available and old money previously announced, spending allocated in small chunks only over the longer term, and spending only kicking in at various times in the future.

The best short cut to understanding the Budget is to see how the assorted pressure groups, like business, farmers, the welfare lobby and the ACTU, respond on the night and during the following day. Their responses can be predictable, but they do have expertise and experience even though they are self-interested.

The Budget is the biggest day of the year for the Treasury department. It is a good example of the huge advantage the Government has over the Opposition in available resources, because the Treasury is there to support the Government.

The Budget is the Treasurer's Big Day too. It may be the making of Wayne Swan if he gets it right. He lacks the commanding presence of previous treasurers such as Paul Keating and Peter Costello, so he has been under pressure. But after a shaky start he's doing quite well against one of the rising stars of the Opposition, Malcolm Turnbull. A win by Swan over Turnbull would shake the Opposition's confidence even more than it has already been shaken.

If Labor wins general acclaim for this budget it will have cemented its hold on government and probably even guaranteed its re-election in two-and-a-half years time. That is a big call, but the moment is that big. The task of the Opposition leader, Brendan Nelson, and his party will have been made immeasurably more difficult.

On the other hand, if Labor falters then the Opposition has been given its first big opportunity since the 2007 election to make inroads into Labor's strong lead in the opinion polls.

LINK:
'Showtime for Swan' (The Australian)


John WarhurstJohn Warhurst is Professor of Political Science at the Australian National University and a columnist with The Canberra Times.

 

 

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Another excellent article from John. I don'tusually take much interest in budgets, but John clearly indicates the importance of this one. If this budget is sound, PM Rudd could be taking another step towards becoming a statesman, rather than a politician. Here's hoping, and dare I say, praying?
David Shinnick | 13 May 2008


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