Pre-election budgets are often met with collective cynicism, and given that Rudd’s plummeting popularity is still the story dominating the conversation, the question in the days after Treasurer Wayne Swan delivers today’s no frills spectacular is inevitable — where’s the bounce?
As Professor John Quiggin writes in Crikey today, it won’t come from any particularly grand gesture; certainly Swan’s Bi-Lo budget rhetoric has put paid to that. But the government may have one trick up its sleeve — a much earlier than expected return to surplus:
…with a bit of effort, the government ought to be able to announce a return to surplus before 2012-13. The political damaging decks-clearing exercise of a couple of weeks ago makes sense only in the context of such a payoff. The government took a series of big hits to get expenditure commitments of the books, when it could have just scaled them back.
The grand prize would be a return to surplus, or at least balance in 2010-11.
So what’s left to go? Quiggin says:
There is one big promise the government could ditch to bridge the gap. The third stage of the tax cuts promised by John Howard in the 2007 election campaign and matched by Kevin Rudd, are due to start on July 1, at a cost of $4 billion. If they were deferred for a couple of years, the surplus might be reached.
Politically, this would be a high-risk strategy. But economically, a rapid return to surplus makes more sense than ever in the light of the European sovereign debt crisis and the likelihood of future global macroeconomic instability.
Given this government’s recent record on the politically unpalatable, forgoing tax cuts could be too big a price to pay. It all depends on whether Rudd prizes bounce over balance…
Budget 2010: All thrills, no frills. Tonight’s the night.
Crikey‘s crack team of analysts are now busy annoying Bernard Keane, losing their press passes, and getting lost trying to find the coffee cart, all to bring you Treasurer Wayne Swan’s “no frills” Budget 2010 TONIGHT.
Subscribers, be sure to check your inboxes around 8pm this evening for your bonus Tuesday night lock-up edition of Crikey. Inside, you’ll find comprehensive coverage by our favourite (and only) Canberra correspondent, along with Professor John Quiggin, editor-at-large Sophie Black and roving gumshoe Andrew Crook, plus Business Spectator‘s Alan Kohler and Smart Company‘s James Thomson.
While you wait for your bonus evening email to hit, visit The Stump at 7.30 ON THE DOT to peruse our Budget 2010 live blog, hosted by the always insightful First Dog on the Moon live from the floor of parliament as the Treasurer delivers his speech. Then stay tuned as Keane and Quiggin, fresh from filing their budget analysis, jump on board the blog to take your questions.
On Wednesday we’ll deliver a bumper Budget edition — with more Keane, Quiggin and Kohler, plus a host of commentators breaking the budget down by sector.
And for all our Canberra friends: tomorrrow night it’s the Buy Crikey A Beer evening! We’re taking over the regular ‘wonk drinks’ at Canberra’s hottest nightspot, so come and meet your favourite Crikey people in person, and First Dog On The Moon as well! Between 6pm and 8pm at All Bar Nun in O’Connor.