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

budget blues « Previous | |Next »
May 9, 2012

The Gillard Government's 2012 budget has been and gone. Most of it was strategically leaked in advance in an attempt to help transform the government’s bad public image and to fend off another Opposition attack about another "broken promise". It probably change the bad image.

There was no attempt to invest in Australia’s future productivity and growth through genuine funding increases to higher education, scientific and medical research, in nation-building infrastructure, in innovation in small firms throughout the economy, and greater steps to decarbonise the economy---eg., axing the diesel fuel excise rebate.

The budget was designed to give some credence to its claims for economic competence and to put a floor under the downward spiral of unpopularity with new family payments (the long shadow of John Howard's deserving poor) from the new mining resources tax, and the now scrapped 1 per cent cut to company tax. It's wealth redistribution not wealth creation says Big Business through hissed breath. It doesn't build business confidence. Class warfare say others.

MoirAbudget2012.jpg

All the headlines in the media are about the Craig Thomson affair not the decline in tax revenue (GST), or the real decline in expenditure as it is the former that is the lever for sustained period of conservative political dominance.

The hostility (anger? resentment?) to the Gillard Government won't be shifted by a budget surplus and the increased funding for the National Disability Insurance Scheme, payments for families, funding for indigenous development, dental and mental health, aged care, communications infrastructure, compensation for the pricing of carbon.

Budget surplus, increased funding and retaining Australia AAA credit would be called responsible fiscal management --fiscal conservatism--- if it was done by a Liberal Treasure. Labor is no longer willing to make the argument that employment and growth are more important than reducing debt, and it has abandoned its brief adventure in defending Keynesian economics and the need for a larger role for the state.

The underlying Treasury assumption is an optimistic one of good economic growth because of the mining boom, even though commodities markets have softened and the risks within the global economy have re-surfaced in Europe.

The budget really turns on the economy doing much better than a lot of people now think.

| Posted by Gary Sauer-Thompson at 8:36 PM | | Comments (12)
Comments

Comments

Cutting defence was a good idea.

Can we expect another low-quality political attack on the government from the Coalition.

"Cutting defence was a good idea"

So was the small step taken to address the massive redistribution of wealth away from working Australia to the rich over the last decade--eg., by starting to wind back some of the tax benefits given to the very wealthy by the previous Coalition government.

well at least the Gillard Government didn't go for the tax cuts and crunched down real heavy on the expenditure side.

"the decline in tax revenue (GST) "

The SA Treasurer Jack Snelling said that South Australia is likely to lose more than a billion dollars from its share of the GST over the next four years.

"the long shadow of John Howard's deserving poor"

Labor has done little for the unemployed and it has targeted its redistribution incentives to working families with children.

A bright young economist I spoke to about the surplus shrugged and said that most economists don't think a surplus is all that important, and no professional economist he knows is opening the champagne. It's political.

Maybe it's the continuing fascination with the "Treasury View" of the UK in the 1930s. That idea has been debunked repeatedly, but is still very influential in the minds of many. It's a real zombie idea that nobody seems able to stake.

Or maybe it's just that the Govt. is waiting for the Reserve Bank to stimulate growth in the slow lane of our two-speed economy, but is so scared of CPI inflation that it wants to take any money left over from mortgage payments right out of households' hands.

The historically significant resources boom has failed to "trickle down" as hoped to the non-resource sectors,

Abbott would be worried about parachutes. The only way he wont be P.M is if it is decided that another person can do a "Newman".
I see a few lining up at the parachute shop getting their faces in the media lately.
The trouble with Abbott is though he tries hard he just isn't quite liked enough by the public ( especially women). He still is the "Clayton's P. M.

Good point, Les. For my money, Abbott should be especially worried about Peter Reith, who has been successful in getting far more media exposure recently than he deserves. But he needn't worry much about Costello!

What a horrible collection of vain old men they are. Disdainful of politics if it means sitting on the back benches, but as soon as it looks as though ministerial jobs might become available for Liberals again, they all want a safe seat. Culture of entitlement, anybody?

Gordon,
The rules are changed now. Now anyone can become P.M. There is no longer a need for them to come from politics. They could come from business, the media or even someone who is popular which is the scary part. Its likely to all get very American now.

I suppose it's necessary to admit that Hawke is still the best example of what Les is saying, having been parachuted into a safe seat and immediately being chosen party leader just before the 1983 election.

Yes and he even appeared on an episode of Kingswood Country in the lead up too.
He had the right look at the right time and we were bottom heavy wth workers. I am trying to come up with names Labor could parachute in now.
Hmmm Don Bradman and Pharlap are both dead. Pharlap was stuffed I think.......