It will be remembered as the mother of all Swan dives by ‘Khemlani Kev’ (for those who can’t remember, Tirath Khemlani was a shady Pakistani money lender of last resort for the economically disgraced Whitlam government in 1975). 

The Global Financial Crisis has almost been a god-send for the Rudd Labor Government.  It has allowed Khemlani Kev and his Ministers to blame ‘the GFC’ for almost everything but the weather. 

They have carefully stage-managed their image as ‘the good guys’ by raiding the surplus bequeathed to them by the Howard-Costello government.  Remember John Howard inherited an $80 billion deficit from the Keating Labor government and, with prudent economic management, transformed this liability into a healthy surplus of around $100 billion. 

During John Howard’s term we were warned of an economic Tsunami as a result of an impending Asian Economic Crisis.  To Howard’s great credit he didn’t try to avoid responsibility for hard economic decisions by trying to pass blame as Khemlani Kev is now trying to do.

The Howard Government weathered the Asian Economic Crisis with prudent economic management.  The Rudd Government is doing the opposite.  They have already spent the surplus by giving the money away and urging them to buy Chinese plasma television sets.  It should have been called the ‘Harvey Norman Stimulus Package!’

Of course everybody now thinks that Khemlani Kev is a good bloke and, if it wasn’t for that nasty ‘GFC’ he would obviously send out more cheques.

The only thing between Khemlani Kev and the next election was the need to frame a budget that will get him over the line.  He used the Labor strategy  of ‘whatever it takes’ and decided to borrow on the never-never.  The bottom line is now clear.  Australia now has a net debt of $188 billion – the highest in our history.  Every man, woman and child in Australia now owes $9000 each – plus interest!

Unemployment is predicted to rise.  Many of those who voted for ‘workchoices’ are now faced with ‘no choices’! 

Employee share plans, the one opportunity for hard workers to own a share of their company, have been scrapped.

The reduction of the rebate on Private Health Insurance will force tens of thousands back into public health which with devastating  effects on our hospital system which is already at breaking point.

Australia is going to pay for Khemlani Kev’s reckless spending for generations to come.  The only positive about it all is that the Whitlam era of disastrous economic management will pale into insignificance when the taxman comes knocking in a year or two.

The latest magic pudding is the daddy of them all – forty seven thousand seven hundred million dollars so that you can download movies in the blink of an eye!  That’s over two million dollars for every man, woman and child in Australia or around seven million dollars for each family.  We know that it takes around 25 years to pay off a mortgage of around half-a-million dollars.  Based on this calculation we are about to be saddled with a 200 year mortgage!  The pundits might well say ‘thank you Kev – you’ve got my vote’.  Their kids, grand-kids and great-grand-kids will have a different view.

That’s if it works of course.  Kev said it would only take 4.7 thousand million dollars for a national broadband system during his Kevin ’07 campaign.  That figure has now increased ten-fold to 47 thousand million dollars.  Given the propensity for budgets to blow out the debt we are about to be saddled with is mind-boggling.

Families paying around $50 for a monthly internet connection better start to plan for a monthly bill of at least $300 when the magic pudding turns out to be an illusion.

There is no doubt that increased Broadband speeds are necessary in a global economy.  But technology is moving at such a pace there is no guarantee that Kev’s grand plan of ‘fibre to the home’ will not be obsolete before it is finished. The business model, funding projections and the validity of the technology are all dodgy at this stage.

Kev’s promise of a computer for every student does not give much hope for the government’s ability to manage projects in this area.  Most are still sitting in boxes because it costs more to wire them up and load the necessary programs than the cost of the computers.  Many will be obsolete before the school has the budget to take them out of the carton!

A new army of taxpayer funded cyber-crats is about to be raised to mix Kev’s latest magic pudding – snake-oil is sure to be a favourite ingredient!

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.