This is very much a Labor Budget – the post-war Labor tradition. It means you have to take the bad with the good.
Tax the rich. Tax the middle and the upper middle. Tax business. In this budget stamp duty, land tax, payroll tax, car registration, tip fees and parking fees went up. It hurts job growth and wealth creation but raises money for the worthwhile if spent wisely.
Spend on public education. Spend on public hospitals. This budget has substantial increases. Fine if spent at the pointy end. But this Budget as an unspent $7.2 million slush fund for anything that might come up in the year.
Increase wages in the public sector. Treasurer Quinlan said there was some money for this, but did not say how much. Fine if you have fewer well-paid people doing a better job, but a waste if across the board.
Have a lot of inquiries and commissions instead of getting on with it. Several education and health inquiries and an Office of Sustainability are in this Budget. Downside is a lot of money gets spend for no outcome. The upside should be that you don’t race off with unthought-out hare-brained schemes.
A big dose of Keynesian economics. Boost the economy in down years with public spending. Rein in during good years. Good theory which few governments have the discipline to continue in the long term. Surprisingly the big surpluses are in the out years – the credit card gets paid off later. Also, the economic cycle if often strangely coincidental with the electoral cycle. This Budget has 2003-2004 in deficit so extra government goodies go into the electorate. The election is in October 2004.
Artificial attempts to increase unemployment rather than providing good economic conditions generally. This Budget provides money for business to employ their first person (with one hand) and the disincentive to employ anyone with the other hand with things like more regulation in workers’ compensation and sops to union mates that hurt business such as this Budget’s on-the-spot fines for employers who breach safety regulations.
In short, the Liberals delivered fiscal discipline, bread and circuses, deregulation that let business rip roar but often with dangerous short cuts. And Labor delivers concentration on the important things like public health and education but at the cost of higher taxes, too much regulation, too much public-sector wage and program costs and the devil take tomorrow with the bottom line.
At least this first Quinlan Budget makes these changes modestly rather than in the grand Whitlam style, but the taste is there and so is the danger – Budget deficits, higher taxes and inefficient great public-sector involvement.
ACT should not assume that this is always a Labor town ideologically just because it has almost invariably returned federal Labor members – there is a high degree of economic selfishness in that. Expansive federal Labor is good for Canberrans’ hip pocket. Expansive local Labor is not.
As to the media management of this Budget, it probably did not work. All the goodies were leaked early, leaving the bad news for Budget day. Media concentrate on the new – which in this case is the bad news. So the overall impression might be the bad and the leaked early good news (new schools and health spending) gets lost.