The Dreyfus Files - The Age
In a speech in Melbourne this week, Tony Abbott explained that this year's budget amounted to a choice for the government between spending decisions that are 'smart' and spending decisions that are 'dumb'.
In this battle between smart and dumb, Mr Abbott dusted off his promise to deliver $50 billion in savings and held it up as the exemplar model for 'smart' budgeting in 2011.
I wonder how many jaws dropped in the room when Mr Abbott defied reality by winding back the clock eight months to a time before his election savings promise was definitively exposed as fiction – when Treasury and Finance revealed a $10.6 billion black hole in his estimates.
Not to mention the fact that his $50 billion in savings, was accompanied by $40 billion in spending.
Australia has a $1.3 trillion economy. This year's budget is being framed at a defining moment for our economy, against a backdrop of natural disasters at home and overseas and softer economic conditions in the near term, and a return to boom conditions that will stretch our economy's capacity over the coming years.
In the face of these complexities, Australia stands at the edge of something great. If we continue to make the right decisions for our economic future, Australia has the potential to usher in a new generation of prosperity.
That's why Mr Abbott's response, detailed in his speech, is so reckless and cavalier. Australians deserve a credible economic alternative from their opposition, but instead Mr Abbott is offering up a casserole of one-liners and reckless attacks in his ongoing attempt to talk Australia down.
Putting a price on carbon is a fundamental economic reform for our future, and in the same way that floating the dollar and removing trade tariffs helped unlock economic opportunity, so will the transition to a low carbon economy.
Mr Abbott used his speech to call for this policy proposal, which has not yet been legislated and which on budget night, next Tuesday, will not even have been finalised (either as to the carbon price or as to levels of assistance), to be fully accounted for across the forward estimates in the budget.
It's hard to see this as anything other than shallow politicking, as Mr Abbott would recall well that the GST revenues (the Howard government's "great big new tax", which Mr Abbott enthusiastically supported) was not detailed in the May 1999 budget, for a very good reason: the legislation had not been passed. It was passed by both Houses on June 28, 1999.
In fact in every budget since the GST was introduced, the Howard government left the figures out of the revenue estimates in the budget.
It was not until the Labor government's first budget in 2008-09 that GST was first included in the revenue estimates in the budget.
It may suit Mr Abbott's scare campaign to suggest devious motives for not detailing a yet-to-be legislated carbon price mechanism in the budget, but it has no basis in reality.
Mr Abbott has repeatedly cited Australia's debt figures, coming off the back of the global financial crisis, as another way to talk Australia's economy down. The reality is we came through the sharpest downturn in the global economy since the Great Depression with one of the lowest debt to GDP ratios in the developed world.
We defied the global trend and avoided recession, and as economic conditions around the globe were resulting in the loss of some 30 million jobs, Australians pulled together to actually create jobs – 750,000 since we came to office.
As a nation we can be proud of that. But that doesn't suit Tony Abbott's agenda.
To outsiders in the international community, Australia looks very much like the 'lucky country' that we've been described as throughout our nation's history.
But it's not dumb luck that got us here, and it won't be dumb luck that takes us forward to the next chapter of our economic future. It'll be smart decisions for our nation's economy, combined with hard work and a sense of optimism about our future – something we must never let Tony Abbott take away from us.
