Aust PM begins task of selling the Budget

Wayne Swan. Photo / Getty Images

Prime Minister Julia Gillard, Treasurer Wayne Swan and other senior Labor ministers have begun the annual, arduous task for any Government of selling its Budget to a nation of sceptics.

Swan managed a small con in leading the nation to expect a tougher document than was produced on Tuesday night - the ABC's economic correspondent Stephen Long dubbed it "as tough as tofu" - allowing him some breathing space.

But it is doubtful Gillard's ailing Government will be able to use it to divert political debate on to more favourable terrain and she may be forced to make some concessions to the Greens in the Senate.

The Budget will not be knocked back. Both the Greens in the Upper House and the independent MPs whose support underpins the minority Administration have undertaken not to block supply, which would bring down the Government and almost certainly install Opposition Leader Tony Abbott as Prime Minister.

Swan produced nothing to effectively blunt Abbott's telling attacks on Gillard's proposed carbon tax and asylum seekers, and may have opened the Government to new flanking movements.

Tabloid coverage has focused on the axing of family tax breaks and punitive steps to be taken against welfare beneficiaries tardy to return to work, while others have painted the Budget as an attack on the middle class.

Sydney's Daily Telegraph depicted Swan as a Fagan picking the pockets of the nation's aspirational families, while the Australian's Tom Dusevic said Swan was "taking money from the folks in the nation's wealthiest postcodes so Labor can look after its traditional supporters".

This is one problem area for Gillard. She is representing the Budget as a statement of Labor values, a point that Australia's second most successful Prime Minister, Liberal John Howard, made on radio: no Government, Labor or Liberal, should so firmly use a brand that at least half the nation will oppose on principle.

Another angle Abbott is already using is Swan's underlying assumption that the nation's present woes will be wiped away by the mining boom.

"This is a Government that is much better at forecasting a surplus than delivering it," he said.

"If it's achieved, it will be made in China, not in Australia."

The exclusion of the impact of the proposed carbon tax has also ensured that this unpopular measure will remain a potent cudgel for the Opposition, especially as the controversial mining tax was included.

Finance Minister Penny Wong has argued that the details of the mining tax have been finalised, while those of the carbon tax are still in flux, but Shadow Treasurer Joe Hockey has been running strong with it.

"The carbon tax isn't in the Budget, and yet it completely undermines their claim that they are going to deliver a surplus in two years time," he said.

"All the revenue figures are wrong, the expenditure figures are wrong, the inflation and employment figures are all wrong."

Gillard and her ministers are selling the positives: A$22 billion ($28.6 billion) in savings, major boosts for mental health, education and training, support for low-income families, more skilled migrants for regional economies, a return to surplus in two years.

Initial responses suggest that while not reeling from shock and horror, voters have yet to be convinced. A poll on Fairfax websites yesterday said only 22 per cent felt they would be better off with the Budget, against 78 per cent who disagreed.

And while probably not a popular view in the suburbs, most commentators argued Swan did not go far or hard enough - although some believed Labor struck the right note.

Peter Hartcher wrote in the Sydney Morning Herald that Labor had eschewed political pandering and that the "weakest federal Government since the 1940s has produced one of the more spartan and responsible budgets of recent times", while the Age's Michael Gordon said it was a "joyless Budget that breaks the mould and might, just might, mark the beginning of a Labor recovery".

Business and industry groups have generally given Swan wary approval, especially for investment in skills and infrastructure.

"Measures focusing on increasing skilled migration, educating the workforce, improving the welfare-to- work trade-off and boosting infrastructure are all positives for the longer-run economic picture," Commonwealth Bank chief economist Michael Blythe said.

Welfare organisations and unions welcomed a number of initiatives, but were concerned at measures targeting groups such as the long term unemployed and some single parents, while environmentalists were disappointed.