When Paul Keating went to the polls in 1996 Australian voters were waiting with baseball bats at polling booths around the country. After more than a decade of Labor rule they had established an number of records – record interest rates, record inflation, record unemployment and record debt.
Incoming treasurer, Peter Costello, inherited an economy with an $80 billion black hole.
Tough decisions were needed to restore Australia’s financial reputation and make us competitive in the global economy. There was a high degree of urgency because of an impending Asian economic crisis.
To Paul Keating’s great credit he realised the need for reform in our taxation system and he argued the need for a consumption based taxation system. Unfortunately this was anathema to the Labor luddites from the left and his plans were scuttled. John Howard and Peter Costello came to the same conclusion and demonstrated the political courage to implement their vision against entrenched opposition from the Labor side of politics.
The States were to be the major beneficiaries of this reform and it was hoped they would invest the windfall revenue into their decaying infrastructure. The daily gridlock on our roads, decaying public transport systems and hospitals that cannot cope with demand indicate that these revenues have been squandered.
The Iemma government is now planning to sell the family silver in a desperate attempt to maintain some sort of economic credibility.
Last year voters were attracted to a promise by Kevin Rudd’s promise to do something about grocery prices and petrol prices. Nothing impacts more on families from Western Sydney than these two issues. Labor’s clever ‘Kevin 07’ message resonated and voters decided it was time for change.
The Rudd-Swan economic inheritance was a stark contrast from their predecessors. Australia’s economy was the envy of the Western world. It has weathered the Asian economic crisis, brought inflation under control, cleared our international debt, fixed the chronic unemployment problem of the Keating era and generated a record surplus. Labor took charge of a well oiled, finely tuned economic powerhouse.
Their first budget is typical Labor in that it has more spin than substance. A reliable guide to Treasurer Swan’s subterfuge is the number of times he works their new cliché, ‘working families’ into a sentence. These ‘working families’ will soon be able to measure the impact of Labor’s first budget when they do their next round of shopping and fill up their ‘working family cars’!
It will be interesting to see who blames who now that Labor governments have their hands on all the economic levers. ‘Working families’ will not have the same problem – they expect lower grocery prices and lower petrol prices because Kevin and Wayne said so.
Tags: Budget, Kevin Rudd
