Wayne Swan played the media like an accordion in the lead-up to the budget. The Treasurer may have proved that he has more political savvy than people give him credit for. His media management skills might not yet compare to Paul Keating's or Peter Costello's, but he's studied the secrets of the masters and he's learned a thing or two.
Before Tuesday, the Treasurer talked tough about fighting inflation and fiscal restraint. He practically said we should prepare for a "horror" budget. And the media believed his every word. Swan's pre-budget pronouncements earned him credibility from business and from sceptical financial markets. Just as importantly, his warnings would have been noted around the board table at the Reserve Bank of Australia.
In the absence of inheriting a budget black hole, Swan had to invent something to complain about. And so the inflation "genie" came into being. He defined his budget as about the need to slay the inflation genie.
Within the Labor caucus, Swan's colleagues were conditioned to expect the worst. An important task for any treasurer is to inspire fear (and sometimes loathing) in the hearts of ministers. Ministers need to learn that if they're going to spend taxpayers' money, they must explain themselves to the treasurer. And the job of treasurers, aided and abetted by finance ministers, is to stop ministers spending that money. Fulfilling their responsibilities has, of course, had consequences for the subsequent careers of treasurers -- as both Keating and Costello discovered.
The upside is that treasurers can gain the gratitude of appreciative backbenchers who are grateful for any crumbs of largesse able to be gathered for their constituents. As we now know, the worst did not eventuate. In fact the worst was never going to eventuate.
Brendan Nelson and Malcolm Turnbull were proved right. There was no dire need to cut the Howard government's programs. Whether or not the programs should have been cut is an entirely different question.
Swan succeeded in portraying the opposition as arguing for more spending and bigger government, while he presented himself as the paragon of financial stringency. Such was Swan's good fortune (or good management) that even the few cuts he did make proved popular. The baby bonus dominated public debate. Seldom has such a small budget cut received so much publicity. And seldom has such a budget cut received so much good publicity. According to opinion polls, a majority of Australians agreed that the baby bonus should be means-tested.
Means-testing the baby bonus saves $60 million. Total federal government spending is $320 billion. Limiting access to the baby bonus reduces government spending by 0.018 per cent. In the scheme of things this is a minute amount that represents little more than a rounding error. But it was presented as an unprecedented attack on middle-class welfare. Means-testing the baby bonus and some family allowances is at least a start on winding back middle-class welfare, but it hardly constitutes an all-out assault. If only Labor was as scrupulous at scrutinising the equity of every other government program.
Perhaps the government could start with universities. Middle-class students dominate the ranks of the country's undergraduates and they pay only a fraction of the cost of their education.
It will be some time, though, before we witness a Labor government attempting to dismantle what constitutes probably the nation's biggest middle-class welfare scheme, namely higher education funding. Indeed, this budget has an extra $11 billion for universities.
In Canberra during the Howard years, discussion about new ideas and policies was often concluded with a Promise -- "that's on the agenda for the next term". In the end the Howard government ran out of next terms. Good things were accomplished in John Howard's third and fourth terms, but much of what he did in those later terms could have been started earlier.
The general rule of Australian politics is that governments make all the tough decisions in their first budget. If the Rudd government has made any tough decisions in this budget, it's difficult to see what they are. One day the government is going to have to make a decision that's a lot more difficult than merely means-testing the baby bonus. The problem with waiting too long to take the tough decisions is that the appetite for risk-taking doesn't increase the longer a government's been in power. Quite the reverse.
Maybe Kevin Rudd and Wayne Swan are attempting to break the political rule about first budgets. Or maybe they think there are no more tough decisions to make.
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