Call Wayne Swan Forrest Gump. Remember when Tom Hanks won Best Actor Oscar for that rather twee film? It was a safe, boring, cautious choice, unlikely to offend too many people, but hell, that film did great box office. Swan has delivered a boring, cautious budget that won’t offend too many people but which will prove a hit with the punters.

Nothing too radical, no savage cuts, but nothing too irresponsible either. It is a budget squarely aimed at the Daily Telegraph and the Herald Sun and it found its mark, with both papers emphasising tax cuts for the worklies and tax rises for the well-off. Swan even received the bizarrely parochial title of “Sydney Swan” from the Tele. The Opposition may complain about “the politics of envy” – more of that later – but that’s not to say it doesn’t go down a treat with a large section of the electorate.

The broadsheets were less welcoming, with the tenor of analysis being that Swan has failed to cut spending enough, but most gave it a grudging pass mark, including, surprisingly, the hardheads at the AFR, who might have been expected to demand more savage cuts and less targeting of business welfare and tax exemptions for the rich.

Business, too, was generally welcoming, with the chorus led by the 21st Cabinet Minister, Heather Ridout, who called it “on-task”, “disciplined” and “hard-nosed”. The National Retailers Association called it a “meat and three veg” budget, a line that will please Swan and Rudd mightily.

At Crikey we’ve been regularly asking whether the Rudd Government will be a State Labor-style bunch of spinners and shysters who will not lead but manage, and manage at best only competently, and possibly much worse. That question has now been answered – mostly, but certainly not entirely, in the negative. Swan had to get the right balance between a booming resources sector and a global financial crunch. Sure, he could’ve — should’ve — hacked into spending by another few billion, but we say that about 9 out of every 10 budgets anyway. The extent to which Lindsay Tanner’s ongoing review process will be allowed to cut the currently forecast 4% growth in real spending in 2009-10 in the next budget will demonstrate whether Rudd and Swan have retained what fiscal rigour they currently have.

Both the Prime Minister and his Treasurer clearly have a State Labor Premier’s terror of unpopular decisions — but also have more vision and greater commitment to long-term change. In particular, it is clear that the Government’s rhetoric about a new approach to Federalism has real substance. For the first time ever, we have a Federal Government genuinely committed to urban infrastructure, hitherto regarded by both Labor and Coalition Governments as strictly the responsibility of State Governments.

Now, via Penny Wong’s $1.5b urban water initiative and the Building Australia fund, we have a Federal Government ready to undertake infrastructure investment in the places where it is needed most. Stephen Mayne today discusses the financial implications of these new funds, and the Building Australia fund is not without its political risks, as there’s always someone somewhere p-ssed off about new projects. But after generations of the Federal Government confining itself to rural and regional infrastructure as State Governments botched and buggered up our cities, this is a major and welcome shift in Federal focus — as long as the allocation process can be kept free of political considerations and the intervention of Labor mates.

It was boring and cautious, but Swan has delivered politically for the Government. Sure, it was not exactly like Gump’s box of chocolates, because by Sunday morning we knew most of what we were going to get. But the dorky naïf who finds himself the recipient of remarkable good fortune, and manages to hang onto his homespun values anyway, still fits the Treasurer admirably.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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