May 25th 2013

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Articles from this issue:

CANBERRA OBSERVED: The federal Budget: Swan's swan song

EDITORIAL: Family policy is more than paid parental leave

HOUSING: Home ownership still out of reach

TELECOMMUNICATIONS: Which broadband policy should Australia adopt?

SCHOOLS: The national curriculum's ideological agenda

ECONOMIC AFFAIRS: A debt-free way to lift output and employment

PROFILE: Left-wing veteran of Australia's 'history wars'

NATIONAL INTEREST: Australian appeasers, past and present

FOREIGN AFFAIRS: The Islamic origins of Syria's civil war

WORLD CONGRESS OF FAMILIES VII: Why natural marriage must be protected

LIFE ISSUES: The unheeded cry of post-abortion grief


CINEMA: Choosing darkness or choosing light

BOOK REVIEW How to win the marriage debate

BOOK REVIEW An unusual story of World War II

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CANBERRA OBSERVED: The federal Budget: Swan's swan song

by national correspondent

News Weekly, May 25, 2013

In his 2013 Budget speech, Wayne Swan chose to use the word “invest” more than 40 times.

“Tonight, this Labor government makes the choice to keep our economy strong and invest in our future,” the Treasurer declared in his opening remarks.

The government, he pledged, was variously “investing” — not spending — money in jobs, in training, in road and rail, in cancer prevention, in bone marrow transplants, in veteran mental health and, of course, in the National Broadband Network (NBN).

There were $378 million of doubtful “investments” in entrepreneurial small and medium-sized enterprises, and an and even more dubious “investment” of more than $330 million to shut down Tasmania’s forestry industry once and for all.

Apart from the obvious question mark over many of Mr Swan’s “investments”, which are nothing of the sort and are conventional hand-outs, the Treasurer’s choice of word displays his fundamental belief that it is government, not the private sector, that is driving the economy. He maintains that government is superior to the market in allocating capital.

And, indeed, Mr Swan was being true to his own redistributive ideology which maintains that the injustices of having a low demographic postcode should be rectified by government.

The second problem is that the government is “investing” in current or borrowed taxpayers’ money that will have to be repaid — in fact, no less than $18 billion dollars of borrowed funds in this year alone.

The use of the word “invest” was intended to make the speech sound as if it was responsible, businesslike and prudent.

In fact, the Budget numbers are in tatters.

For the absolute “no ifs or buts” guaranteed $1.1 billion budget surplus promised last year has turned into an $18 billion deficit this year. Yet Mr Swan wants us to believe we will be back in an $800 million surplus in 2015.

But everyone knows, including Mr Swan himself, that he won’t be there then. In all probability, Mr Swan won’t even be in the parliament.

Wayne Swan’s budget used a series of predictable measures to pull back government spending, but 60 per cent of the “savings” were in the form of revenue-raising measures.

The $5,000 Baby Bonus, which was introduced by Peter Costello, has been abolished, but still collectible in some form by poorer families.

So this was Labor’s last shot in the locker — to prove they are credible economic managers and to lock in some legacy reforms in education and disability care.

Unfortunately, neither will be achieved, simply because the government lost its credibility over a series of policy failures and misjudgments.

However, what Mr Swan has attempted to do is to lock Tony Abbott for at least a decade into Julia Gillard’s monuments of more lavish funding of schools and disability care, while also cleverly if not mischievously locking him into harsh “savings” measures in the “out years” or in the years ahead.

Mr Swan wrote a book called Postcode: The Splintering of a Nation (Melbourne: Pluto Press, 2005), and returned to this perceived injustice again in his 2013 Budget speech.

For good or ill, Mr Swan has really been the lynchpin of the Rudd and Gillard governments.

In some respects, his longevity and his ability to achieve his own political wish-list has made him the most successful Labor politician in the government, even though outside observers consider him to have been a serious disappointment as Treasurer.

He has got what he wants.

And now no one in the government believes their electoral fortunes are salvageable in September.

Overall, the 2013 Budget will be remembered as one that lacks credibility, and which is entirely focused on Labor’s long-term historical reputation rather than fixing the country’s immediate problems.

For what Mr Swan and Ms Gillard will be hoping is that the Budget will achieve for them a place in the Labor history books.

Along with previous Labor governments’ milestones, such as the introduction of the old age pension, Medicare and superannuation, a national scheme to assist people with disabilities will be there for decades to come.

It may not look affordable now, so the Labor line goes. It may be putting us into hock for many years to come. But one day in decades to come it won’t matter, because Wayne Swan and Julia Gillard made the effort to adhere to their Labor values.

That is the feeble hope.

The reality now is of a government that could not get much right at all, even the benchmarks it has placed on itself.

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