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May 09, 2007
So it was a politics style budget as expected, the centre piece of which was the higher education endowment to help the long-term funding of tertiary education. That's good politics, as it cuts the ground from under the Rudd-ALP focus on an education "revolution".
The tax cuts for Howard's battlers, and spending up big over a range of portfolios, such as the environment, child care, transport and fighter plans, which cover the black spots where the ALP has some traction, land another punch on the ALP.
It was a cleverly crafted budget. Costello even gave the impression of more spending to come to ease the political pressure points, such as those around climate change. So is smirks all round the Coalition ranks judging from Question Time, the Coalition has the cash to fill the policy gaps identified by Labour.
The ALP is going to struggle to attack the package. Obvious gaps were structural reform to improve productivity or address the causes of climate change. Or broadband, for that matter. Or tax reform? Or export growth to address the current account deficit. Costello could have used the huge increases in revenue to do something to address these in a significant way and link them to CoAG's National Reform Agenda. But he didn't.
Take the much heralded water initiative. The Budget avoids the tough issue of buying back water licences. Only 30% of the $3.1 billion allocated to the buy back will be spend in the next four years. The National's stand in the way of reform, as they refuse to acknowledge the reality of the overallocation of water licences by state governments. Costello's budget does nothing to change that, as there is just $27 million for buying back overallocated rights in 2006-7.
And energy? Well, all that has changed is that Costello has restored a programme that had been cutback in 2006---doubling the rebate for solar panels for households. Big deal. Especially after spending a decade denying the existence of global warming.
However, the political reality is that the ALP needs to win 16 seats to govern in his own right. That’s still a big ask. Queensland needs to turn to do it. The Coalition has yet to sniff defeat. Will water and climate change help turn an election? Maybe in the marginal seats of South Australia? Will they do so in Queensland? How many seats there are swinging to the ALP. I heard 8 had at a meeting in Canberra yesterday. No doubt the ALP has lost some in WA.
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I notice that elswhere, Andrew Bartlett has drawn attention to another shortcoming- the lack of serious cranial work, yet again, involving indigenous affairs.