Budget Reply Has Sausages And Sizzle, But Skips The Wedges

TONY ABBOTT has used his budget reply speech to appeal directly to voters for their support; measured and Prime Ministerial, he dodged the attempted political wedges Labor built into its budget, making it clear the footprints of this ALP government will largely be erased by a Coalition government.

Budget reply speeches — indeed, budget speeches themselves, as evidenced by Wayne Swan on Tuesday — have increasingly become political rather than economic exercises, aimed more at the achievement of a set of political objectives than they are at the announcement and debate of specific measures and initiatives, or their cost.

In this context, Abbott’s address tonight was a triumph; he has emerged the victor in terms of the annual battle between Treasurer and opposition leader, and is now seemingly set to proceed to a colossal election win against Julia Gillard in September.

(Readers can access a transcript of the speech here).

Make no mistake, tonight’s speech represented a balancing act that could well have gone disastrously wrong.

Labor — with a budget crafted as cleverly as its straitened and self-inflicted circumstances permitted — had set traps for Abbott everywhere, then tried to goad the opposition leader into rescinding cuts it had announced and/or reneging on supporting spending measures.

That Abbott was able to neuter these tactics is no surprise; that he did so with great aplomb and dexterity caught some on the government benches by surprise.

His announcement that a Liberal government would “reserve the right” to implement any or all of Labor’s cuts, along with implementing none of Labor’s spending commitments “unless specified,” clearly ensures Labor will wear the political opprobrium for the budget deficits it has presided over, as well as the political pain associated with fixing the mess.

It allows Abbott the flexibility as Prime Minister to restore individual measures if additional offsetting savings can be found, but cut them — and do so in Wayne Swan’s name — if they can’t.

Abbott has confirmed that a Liberal government will proceed, as pledged, with the NDIS; on Gonski, however, it seems obvious those “reforms” will never be implemented, with Abbott saying his government would not be held to a scheme that is not national.

As foreshadowed in our dissection of the budget, abandoning Gonski could be a good decision: it also saves billions of dollars that are additional savings over and beyond those earmarked by Swan.

Much of what was said tonight — on trust, credibility, and restoring confidence in government — goes to the heart of the Liberals’ likely election campaign; watch for a lot of running to be made on the themes of honesty and trust as the Coalition continues to hammer Labor on what has been its weakest point since 2013.

Abbott confirmed what he has previously promised — to abolish the carbon tax, but retain the compensatory measures already introduced — whilst announcing an additional $5 billion in savings to pay for them.

This has already led to howls of outrage from Labor figures — particularly superannuation minister Bill Shorten — about spending cuts for battlers and tax cuts for billionaires.

Yet it remains to be seen what credible case Labor can make for opposing these measures, with a bloated bureaucracy to remain larger than in 2007 even after Abbott’s cuts, and other measures for low-income earners abolished on account of the revenue instrument supposedly funding them raising no money, and slated by the Liberals for abolition.

Abbott has flagged that any Coalition spending policies released between now and the election will be revenue neutral; he has also undertaken to release costings once the pre-election update of government finances is released shortly before polling day.

Yet his approach tonight — what the Coalition might keep, cut, or introduce anew in office — has pre-purchased an incoming Liberal government enormous flexibility.

Any grilling on policy costings need now only be met with a formulation simply stating that a) Labor has lied about the numbers for six years, b) any commitments are contingent on the discovery of the true state of government finances, and that c) adjustments may need to be made if further budget blowouts are discovered after the election.

And having thwarted the budget landmines Labor had planted for Abbott, the government was faced with the galling experience of having to watch Abbott speak directly to voters in what can only be described as an election speech — and a rather good one at that.

It was instructive to observe the reactions on the faces of Labor frontbenchers.

Wayne Swan looked typically smug, as if there were some hidden threat to Abbott that remained undiscovered; being the old numbers man he is and was, Swan will no doubt continue to plot and scheme, but his political skills to date suggest Abbott has little to fear.

A seething Julia Gillard, on the other hand, looked as if she might spontaneously combust; it isn’t difficult to understand why when Abbott’s speech tonight probably hammered the final nail into Labor’s coffin, and the coming election campaign will obliterate any remnants of her political credibility — and Gillard knows it.

The budget was basically the last big chance for Labor to turn the political contest around, and it has failed.

There are no more big-ticket agenda items left in this term of Parliament; and to the extent there may be — a no-confidence vote moved against the government by the Liberals — the Gillard government will, perversely, be in far worse political health if it survives it than if it were thrown from office at that point.

Above all, Abbott’s speech tonight was simple, honest and credible: attributes that provide a stark contrast to his opponents and to the budget delivered by Wayne Swan on Tuesday, and an approach which will be, if maintained, an asset to Abbott as Prime Minister.