In recent months, the Government talked it up as a major “fight inflation first” exercise but last night they delivered something much less fierce and more politically palatable. Robin Hood’s much vaunted re-appearance on the national stage was a tame affair.

This intriguing combination of politics and economics has been given the umbrella message of “conservative, balanced and responsible”.

Nevertheless, the Government has blurred its messages. Yesterday, Swan said the Budget was “tough but fair” but under questioning admitted it was more of a “mild tightening”. Swan said “the Government wasn’t elected to be popular” but it seemed just as keen to deliver on all their election promises (something Hawke and Howard didn’t do) as they were to make a real fist of fighting inflation first. And, the Budget is targeted firmly at “working families”, the group the ALP says delivered it the Lodge last November.

Far from tackling inflation as the great national priority they claimed it was, they have tried for something more like “quite tough but still re-electable”. Consequently, the Government has wound back its rhetoric on inflation. It now says the Budget will not put upward pressure on inflation, which is a minimalist definition of economic responsibility in the current circumstances.

As they flagged it would, Swan talked about the future repeatedly (22 mentions) in his flat and nervous Budget speech. He spent a lot less time on the fairly grim short-term economic outlook for the nation, which features slowing economic growth and rising unemployment.

The Opposition responded with a litany of criticisms. No surprises there. Opposition leader Brendan Nelson went indignant and said that the Budget would do nothing to reduce grocery and petrol prices or improve housing affordability. This is a nice populist line but it sets a tough test for his Budget reply speech tomorrow night. This is particularly important for Nelson’s leadership. He must look plausible and credible on the Budget debate this week or he will be outshone by Malcolm Turnbull.

Nelson also needs to use his Budget reply to bring some clarity to the messages his side is pumping out. Is inflation a big problem or not? Do they support bigger spending cuts and where? And what is there position on means testing? They won’t get anywhere if they can’t quickly get some sharp focus in these areas.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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