How should Labor respond to the Budget?
How should Iron Bark and the ALP respond to Peter Costello’s profligate
and cynical Budget? Easy. By saying it’s, well, profligate and cynical.

The first part will be the harder – but it’s doable. It will even help Labor re-establish its economic management credentials.

The Budget, after all, is the product of a big taxing, big spending Liberal government.


Alan Kohler’s comment
yesterday that this is “the most profligate
budget in history” is thoroughly deserved. So were his remarks about
the Budget “big lie”:

“The big lie in all budgets is the phrase ‘over four/five years’, as
in: ‘the family package will cost $19.2 billion over five years’, or:
‘the total cost of the superannuation measures will be $2.7 billion
over four years’.

“There is nothing ‘total’ about any of this; it just happens that the
Treasury bean counters add up only the next four or five years because,
well, because that’s just what they do. That’s how far their forward
estimates go; the spending, of course, goes on to infinity…”

It will be hard for Labor to attack the measures themselves – but it can set up a terrible wailing about their consequences.

Dump $8.3 billion worth of new Budget measures into the economy in less
than one year – half of it within weeks – and how will the Reserve Bank
react? Yup. Exactly.

Do it against a background of $750 billion plus of household debt and
an overheated housing market to the mix and you make even Jim Cairns
look like a good economic manager.

No Australian will lose their home or go bankrupt before the election –
which must be on August 7, the earliest possible date – but their will
be thousands of tragedies around the nation in the coming 18 months or
so as the hangover from Howard’s binge starts to bite.

That’s Liberal economic management for you, Labor can say. Do you want
to give your house back to bank just so John Howard can top Malcolm
Fraser’s and equal Hawke’s election record?

But don’t worry. You may lose your home or go bankrupt to give John Howard a fourth election win – but not for a while.

And this is where Labor is on stronger ground – the sheer cynicism of the Budget.

Why do we keep saying August 7 is the election day? Because it’s the
first date an election can be held – and about the only date an
election can be held until October.

After August 7 there’s the Olympics and then the football finals – plus God knows what in Iraq or whatever.

And with an August 7 poll, the economic and budget review carried out
under the Charter of Budget will be virtually unchanged from Tuesday
night’s figures. The review before an October poll would have to take
account of newer figures. Any downgrade in the growth rate or projected
increase in inflation would see the Budget surplus disappear – leaving
no money for a fresh round promises.

The Budget is an election binge dressed up as a statement of economic policy – but that’s only the start of the cynicism.

If you’re a marginal Government MP, be afraid. John Howard is about to
lead you into an election in much the same way as he lead the nation
into war in Iraq. With information that at the very best could be
called “sexed up”.

The public are rightly sceptical of Howard’s looseness with the truth –
but on issues like Iraq or kids overboard, it hasn’t hit close to home.
Now Labor can make sure it does.

Much has been made on Tuesday night’s tax cuts – yet in the vast
majority of the electorates Labor needs to win to form a government the
average household income ranges from $30 – $42,000. People in these
seats won’t get tax cuts. They will enjoy the family benefits changes –
but what benefits keep getting stuffed up royally? Overpaid, underpaid,
you name it? Family benefits.

Get ready for Labor to cite lots of case histories – all from Government marginals. Complete with gruesome details, naturally.

Labor can tweak the cynicism theme even more by going back to the tax
attacks Bob McMullan so successfully set up as shadow treasurer – the
only bright point of the Crean interregnum.

How much bracket creep is the Government gathering this year? Around $2.5 billion.

What are the tax cuts worth in 2004-5? $1.9 billion.

Tuesday’s Budget confirms the Howard Government once again as the
highest taxing administration in Australia’s history. Total taxes are
set to increase to $217 billion in the year ahead.

Average taxpayers are shelling out $5,500 more in income tax then they
were under Labor. The forward estimates suggested they’ll be handing
over more than half this again – an extra $2,800 – by 2007-8. Then
there’s everything their paying GST.

This is the Howard achievement as it really is – and we haven’t even
got onto worries about the costs of health and education and access to
these services, the civic program that when you do the sums offers just
$1,600 to every school or any of those other topics.

First there was A Fistful of Dollars. On Tuesday it was For a Few Dollars More.

The first was illusional. The second is delusional.

Go for it, Mark boy! Get ‘em.

Hillary Bray can be contacted at [email protected]

Peter Fray

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