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

Budget politics « Previous | |Next »
May 1, 2011

I guess that Gillard's speech at the Sydney Institute on April 13 set the scene for the 2011 budget. It warned us that the forthcoming budget would see a tight rein on spending to return the Budget to surplus in order to make the boom last.


Will this austerity budget in the context of revenue shortfalls counter Abbott's key message that Labor's policies are failing and that they constitute a betrayal of ordinary people?

A strong theme of Gillard's speech was welfare-dependency and extensive welfare reform, by which she meant:

Income management, improving school enrolment and attendance, tighter eligibility and smarter employment services for adults with some disability. Restructured employment services, investing more resources in those with more complex problems.

The subtext is that passive welfare is a malaise that must be tackled. Welfare reform and workforce participation go together; linked by the dignity of hard work.

In the speech Gillard claims that there are 230,000 people who have been unemployed for more than two years and 250,000 families where no adult has been working for at least one year. Gillard says:

Relying on welfare to provide opportunity is no longer the right focus for our times. Our strong economy gives us a real chance to create opportunity from the cradle to the grave.The problem of long term welfare dependency has been long discussed but the new realities of our economy create quite a different policy environment from the recovery of the 1990s or the growth of the last decade. Because we have unprecedented demand for skills and labour, this is possible. In today’s economy, inclusion through participation must be our central focus. It’s not right to leave people on welfare and deny them access to opportunity.And every Australian should pull his or her own weight. It’s not fair for taxpayers to pay for someone who can support themselves.

Will this appeal to Labor's heartland and help to stop the drift to the Abbott Liberals? Is that the politics of the 2011 Budget?

There is next to nothing in Gillard's speech about productivity, ie., working smarter rather than working harder or longer. Working smarter means better education for those whose work skills have deteriorated, or never existed in the first place.

| Posted by Gary Sauer-Thompson at 11:19 PM | | Comments (3)


the leaks say that there will be a near $50-billion deficit in 2011-12. That will fuel Abbott's "pay back the debt" attack on the ALP.

Rob Burgess in Business Spectator says that:

I agree with most commentators that Tony Abbott is doing a remarkably good job of pummelling the government at present – taking every opportunity to attack the carbon tax, the government's appalling record on illegal boat arrivals, the need to toughen up on indigenous intervention, and the need to slash government spending in the May 10 federal budget.
He adds that every blow hurts, including his call for "bipartisan" efforts in the Northern Territory intervention.

Ross Gittens makes a good point in the National Times about Australia's good fortune re the mining boom. He says:

he other big thing we need to do is increase our investment in ''human capital'' - in educating and training our people. It worries a lot of us that digging stuff out of the ground and flogging it to foreigners seems a primitive and unsustainable way to make a living. What do we do when the stuff runs out or the boom busts?

He adds that we don't delude ourselves we can get back into manufacturing in a big way, in competition with high-tech countries such as Germany or low-cost ones such as China. That game's over.

No, if we're recycling income from primary industry we've got to move it past secondary industry to tertiary - the services sector. Apart from minerals and farming, the main thing we have to sell the world (and meet our domestic needs) is labour.

We've got to make our labour as valuable as possible, which means making it as skilled as possible. And that means becoming obsessed with education and training.