The tabloids have nailed Wayne Swan's budget cuts -- taking money away from mums, but keeping the gold pass travel for retired politicians.
It doesn't matter that the gold pass doesn't actually cost that much, or is under review, or whatever, it isn't a good look. Ditto for increasing HECS for maths and science -- the education revolution is on hold.
Wayne Swan faced some tough questioning at his press conference and the Mid-Year Economic and Fiscal Outlook (MYEFO) has not been well received.
The fact that the MYEFO is being received at all is a dramatic change. It is usually a dry document examined only by true-believing policy wonks; this year it has dominated the news cycle.
This highlights the community's growing interest in public finance. That in itself, however, reflects a growing concern about the state of our public finances. To be fair, we are in a much better position than most other, if not all, comparable economies. On the other hand, we are not where we'd like to be or should be.
The MYEFO contains various fiddles and fudges that characterise public finance accounting, increased taxes and charges, and some spending cuts. All up the figures generate a $1.5 billion surplus next financial year. So far, so good.
Yet nobody really believes the numbers and the expectation is that more savings (read deeper spending cuts) will have to be found between now and the May budget. Treasurer Swan is well within his rights to withhold announcing those cuts until the budget, but the pressure to perform will intensify over the next six months.
In addition to substantial spending cuts, some symbolic cuts need to be included in any package. Gold class travel has to be wound back. The living away from home allowance for politicians should be reformed along with reforms of the private sector allowance.
There is one existing symbolic cut that should be reconsidered. The so-called efficiency bonus is lazy policy. Government agencies will have to find a 4 per cent cut in expenditure (up from 1.5 per cent). These sorts of savings are very popular in many organisations where senior management want to avoid tough decisions. Spreading the pain equally avoids asking some profound questions.
If something is worth doing, it's worth doing well. That means proper resourcing. Efficiency dividends often strip out resourcing but don't strip away responsibility. That means more gets done badly. Even those with a preference for smaller government need to recognise that good government doesn't mean cheap government. So rather than strip 4 per cent from everyone, the Government should be examining all activities it undertakes and considering whether to continue them. In fact there could even be an argument for increased spending in some areas.
If asked to nominate those areas where substantial reductions could occur I would point first to foreign aid. Right now it's not a lot of money, but remains a good starting point. The Department of Climate Change could be dramatically reduced and folded back into Treasury and many of the smaller agencies currently exempt from the efficiency dividend could be placed on the chopping block. The ComCar scheme could be axed -- politicians should pay for their own public transport the same as everyone else.
Of course my choice of cuts is likely to be controversial -- but that is the whole point. If Government needs to save money it needs to cut programs and shrink in size, not just provide poor quality service. Making those choices is difficult and tough.
If Wayne Swan wants to actually deliver a surplus next year he needs to a stop talking about being tough and become tough.
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