For a Labor federal budget this looks awfully like a set of Liberal numbers.
Cuts to single parents benefits for one, education rebates for another, even down to the accompanying “battlers’ budget” soundbite — they all smack of traditional Howard moves. As for deep cuts, as Bernard Keane writes, “if this is an austerity budget, it’s a pretty comfortable version of the hairshirt”.
And then there’s the return to surplus.
All of it boils down to a pretty banal budget — few surprises, which on a positive note means its also free of accounting gimmicks. Most of the savings that have been announced are real cuts in the deficit rather than smoke-and-mirror trips.
But it also marks a big departure from the Big Vision thinking Rudd and Swan displayed to sail us through GFC mark 1.
But what if we face another global crisis? After all, the eurozone is teetering, the Chinese and US economies are still faltering and Britain is in recession. A new global crisis is a real possibility for the coming year.
As our resident economist John Quiggin asks: “How well, or badly, does the budget help us to prepare for such a shock?”
This budget marks a return to the pre-crisis orthodoxy that tight fiscal policy is good because it makes room for interest rate cuts. And no one wants to say the s-word out loud.
“Having effectively conceded defeat to the conservatives in the argument over the stimulus, the government will find it very difficult to flick the fiscal switch if we are faced with another global crisis,” says Quiggin.
Plan B? Cross everything and hold on to your cuts.
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