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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

seducing middle Australia « Previous | |Next »
May 7, 2007

It's budget week. Christmas time for voters who are disgruntled and battling. That's the appearance of the budget's strategic assaults on a Rudd-led ALP. If what counts in politics is winning, then Howard and Costello will spend big dollars to buy their way out of the Coalition's current position of trailing a resurgent Labor Party. They have around $10 billion and $15 billion to play with. Will the Howard Government act as if the resources boom will last forever?

Bill Leak

No doubt the message will be simple: a raft of election-year goodies in one hand ; in the other hand an argument that Labor cannot be trusted with the keys to the Treasury. The 2007 budget's wooing the electorate (low and middle income earners) will not succeed in re-electing the Howard Government by itself: it is but one brick in the repositioning. The recent changes to Work Choices are another brick.

No doubt the budget will be sold as 'investing in Australia's economy for the future' through the spending on infrastructure. Does that mean addressing climate change other than in the form of government advertising or subsidies to the coal industry? Will it begin to take action or continue to do nothing?

What limits the big spend is that an expansionary fiscal policy (lots of tax cuts) puts upward pressure on prices, interest rates and the Australian dollar. Australia's unemployment rate is very close to being as low as it can go without wages growth beginning to accelerate. Australia is also as close to the full employment of its resources of land and labour and capital as it has been in 30 years. So major spending could overheat an economy operating at full capacity.

What we have developing is workforce constraints: the growth of the work force as a whole will slow as the number of young workers entering the work force dwindles to barely match the number of older employees leaving it.That will limit economic growth. Will Costello address that situation in the 2007 Budget? Or the failure to make the shift from domestic drivers of growth to export demand. Export growth has been low--- around 2.5%, even with a resources boom.

| Posted by Gary Sauer-Thompson at 8:52 AM | | Comments (16)


the budget will be a cynical attempt to keep power at any cost and I for one hope that people will see past it. The liberals deserve to lose and I hope they will.

Wayne Swan has been Very unimpressive this week and is looking less like an alternative treasure by the day. I think it will reflect badly on Rudd in the days afer the budget.

when has Wayne Swan looked impressive? Can you jog my memory?

50 cents
we could take the money and run could we not?

New Zealand continues to look attractive to me!

Will anybody be listening when the budget comes out? More bribes, pork barelling and focus group based spending may not actually engage with voters this time around, it certainly didn't last year.

Yeah, I think you got me there! Think I'll get me joggers on too. I'll race you's to the South Is. At least they got water.

I'm definitely with Ken Henry, the Treasury Secretary, on this. Recall that he told his staff in March that the only budget programs that would genuinely increase Australia's wealth were those that boosted either population, workforce participation or productivity. He said:

You might be thinking that that's all pretty obvious. But one of my messages to you today is that if you understand what I have just been talking about, then you are a member of a rather small minority group.

Judging by all the budget leaks to soften us up and to think good thoughts, it look as if the Government either doesn't understand or doesn't want to understand the link between productivity and higher standards of living.

The ALP does though--eg. Rudd and Craig Emerson. Not sure about Wayne Swan though. Or Stephen Smith. Roosters are not known for their ideas.

Well, much criticism of Swan this thread, but Swan's first comment on the budget was to do with the budget's predicted weakness, as also mentioned in the last paragraph of Gary's comments.
That is, the continued perverse refusal to address training and strategic infrastructure spending issues. Brown felt environment had again dipped out, too.
Is there a little subliminal hint to the mortgage-belt at the bottom of this? Along the lines of, "we could have spent it on useful things but prioritised you profligate lot again; don't forget to feel obligated come voting time".
After all, to watch Costello, you would think he was overcome with his own munificence at giving you his money, when he is actually giving you (a little of) your own money back you paid in for the health of the system of which we all a part.
What really baffles me though is, if things are so "good", why the need for such mean policies as Workchoices and a generally spiteful long term policy toward the unemployed?
And why is the underlying level of unemployment again ignored by the media pundits?

I wonder what the Liberals focus groups told them about the pensioner vote, that they came up with the $500 cash per each offer.

Purely anecdotal of course, but those I talk to are very frightened by Howards foreign policy.

I listened to Wayne Swan's Treasury reply to Costello this afternoon. It was not very good. The man has little grasp of economics. There was little critique of the economics underpinning the Budget.

My judgement is that Wayne Swan is out of his depth.

His speech was a political response by one of the ALP's machine men. Costello has a much better grasp of the economics upon which the budget is based. Swan doesn't even try to gain the knowledge.

A similar judgement about Swan's performance.

I think the Beautiful Swan got turned back into a Duck
Wayne Swan (0)

As you imply that $500 is a very political gesture. The vote buying is quite naked.

Some of Australia's most popular retirement zones - including southeast Queensland and the NSW central coast are looming as key election battlegrounds.

With the federal election just four months away, the senior's letter-boxes will contain a cheque from Costello to the value of $500. The total cost to taxpayers is $1.3 billion.

It's all part of the Howard Government's on-going courting of the pensioner demographic. Keeping them locked into the conservative onside.

I would have thought that it would have been better to help them stay in the workforce for a day or so a week; or helping them out as volunteers.

Gary, would have Tanner have been more up to the job, in that case?
He was touted as a potential treasurer after Rudd's win. Does he have genuine ability that has been overlooked for factional reasons, or is he just a another goose.
"If it walks like a duck; talks like a duck, it must be a...".
Speaking of Tanner, am reminded of Philip Adams' column in the OZ, where he (Adams) reckons that what the ALP really lacks is a good Keatinesque of Mick Youngish enforcer, just now.
The Tories, by contrast, have headkickers in profusion and in Rann in SA has had the luxury of Foley to do some of this more unsavoury work for him.

My understanding is that those on the front bench are there from the Beazley days, and that this reflects the dominance of the Right that supported Beazley's leadership against Crean and Latham and Gillard.

Lindsay Tanner is much better than Swan. See here. Tanner has a better grasp of the issues. Swan knows the lines.

Craig Emerson, who has a PhD in economics and lots of economic ideas, is also better than Swan. But Emerson has little factional support from the Queensland Right that sits behind Swan.

They never learn, do they?
FIRST you get the prize; THEN you divvy spoils.
Meanwhile society dips out on the possibility of a credible alternative because of these naffwits!

yes, you are right. Factions are the bane of the ALP. They are more about fiefdoms not policy. They do need to be broken up and the power of the factional heavies weakened.

Presumably it is factional politics that is resulting in the leaked attacks on Julia Gillard. Presumably these come from the dinosaurs of the Right who detest a strong woman in a a position of political authority.