Wednesday, May 15, 2013

The Budget: What's in it for...

Labor's 2013-14 Federal budget deserves a close look.

First, an ALP video for the true believers: The Federal Budget in 3 minutes

Next is the usual calm economic analysis from Greg Jericho (Grogs Gamut). For fans of Greg's graphs, this post has six:
The coverage of budgets is invariably an attempt to find the narrative - some overreaching story which apparently explains what has happened and what is coming in the next year or more.

Some stories can be written without even paying heed to the innards of the budget papers. Take the Treasurer's speech which began:

Tonight this Labor Government makes the choice to keep our economy strong and invest in our future. To support jobs and growth in an uncertain world.

This could be cut and pasted and used in any future (or past) budget speech regardless of party, year or state of the economy.

For the most part the political narrative has been written as well. This is the final Swan budget, the Swan song, the attempt to lock in Labor's legacy. No budget is ever really a political game changer, and for the Government this budget comes very much in the shadow of last year's.

A year ago the narrative was about a surplus - the path to surplus was clear and it was also writ in stone as a holy good.

This year, if there is any real narrative beyond the usual humdrum, it is that we might finally be facing up to the reality of the post-GFC world.
Budget faces up to Australia's economic reality

Religious-based Overseas Aid NGO Micah Challenge expressed concerns that the foreign aid target of 0.5% of Gross National Income has been delayed a year and funds diverted to asylum seeker programs within Australia. However, its response contained a strong plus side:
The aid budget will grow by $518 million from last year, reaching almost $5.7 billion dollars, or 0.37% of Gross National Income (GNI).

...the Foreign Minister went out of his way to note the strength of the community campaigning, and Parliamentary lobbying, that led to foreign aid being increased, when many other Government programs are being cut.

...Second, there was a bigger than expected increase in funding to Water, Sanitation and Hygiene (WaSH) programs – a 70% increase from $164 million last year to $279 million in this budget.

...The Government also announced a commitment to invest $391 million over the next for years to accelerate progress towards achieving the Millennium Development Goals in Asia and the Pacific – targeting, particularly, MDG 1 on hunger, MDG 2 on education and MDG 5 on maternal mortality.

Finance commentator Michael Pascoe has had this to say to the scaremongers:
After all the rather mindless carry on about having a surplus or not having a surplus and then just how big a deficit it might be, we can at last breathe easy with the knowledge that the federal government will finish this financial year with a deficit of about $19 billion. And that’s actually a fine thing.

And so is a deficit of about $18 billion for the next financial year. Substantially smaller deficits this year or next really wouldn’t be worth the economic cost.
Thanks for the deficit, really
Finally, the expenditure about which Julia Gillard's government, indeed all Australians, should be justly proud - the National Disability Insurance Scheme (DisabilityCare). From Julia's speech to parliament:

Much of the mainstream media have chorused that none of this matters because the election result is in the bag for Abbott's austerity Coalition. They seem to acknowledge that the Liberal National razor will cut most worthwhile initiatives if they win. For the rest of us, there are votes to cast in four months time - a chance to vote for meaningful progressive programs.

A chance to vote against the cynicism and negativity bred of self-interest and greed.

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1 comment:

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