So the gig’s up: Peter Costello’s got a $10 billion Budget surplus stashed away in Treasury’s hollow logs.

As John Garnaut and Anne Davies point out in the SMH
today, the resources boom is filling up tax coffers like never before,
leaving Costello with the prospect of a massive pot of gold come Budget
time: Tax goldmine puts heat on Costello

Of
course, Costello couldn’t deny it in Parliament today, facing
questioning on the topic from Kim Beazley. A larger-than-expected
surplus is an old trick: Treasury is always conservative in its Budget
forward estimates, leaving the Treasurer of the day room to pull a
rabbit out of the hat for the markets on Budget day.

A
mega surplus, however, provides Costello with certain political
difficulties just now. This is the Treasurer, after all, who watched as
the PM ramped up a $66 billion election campaign spree.

He
is getting himself a reputation for profligacy. So with the economy
stalling, interest rates rising, and the national debt blowing out to
record levels, how will Costello handle his windfall?

There
are many out there keen to help him spend his money. Over the next
three months, the Treasurer will get a glut of well-meaning advice from
every bleating self-interest group in the nation – from farmers seeking
“adjustment packages”, to middle-class welfare advocates, to
nation-builders demanding massive infrastructure investment.

Look
out for Alan Jones to ramp up the “turn the rivers back to
drought-proof the nation” campaign. Maybe we’ll even see Geoff Gallop
march up to Canberra, cap in hand, seeking funding for a brilliant new
canal from Broome to Perth?

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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