More reasons why the Abbott budget is so hard to sell

5 Dec 2014

The budget’s shortcomings don’t end with the fairness problem

THE ABBOTT government’s problems began long before the 2014–15 budget, but now the budget is at the heart of them. It has failed to win support from the voters, and failed to win support from the Senate.

Why? I think there are two reasons. The first is that its measures, taken together, fail the test of fairness. That’s well known, and the opinion polls show the public’s reaction.

The second is not well known, but it may have been grasped intuitively by many Australians, which is why the government’s appeals to national interest have fallen flat. In short, the sum of the government’s actions is not to reduce the budget deficit, but only to rearrange it.

And now, as treasurer Joe Hockey will tell us on 16 December when he releases the heavily revised Mid-Year Economic and Fiscal Outlook, or MYEFO, the plunge in mineral prices and the economy’s failure, yet again, to meet budget forecasts mean a return to surplus is now just a distant goal, and we will face big deficits all the way to the next election.

But even back in May, if you looked at the budget numbers, the net impact of the Abbott government’s policy decisions would have cut the deficit by just $4 billion over its first four years in office. Add in a crucial cost the budget numbers left out, add in the extra spending approved since the budget, and the net impact of the government’s decisions has been to increase the budget deficit – not to reduce it…

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