For all the tough talk before the Budget, the cuts announced on Tuesday night were small scale and posed no risk to Wayne Swan taking the title ‘ Australia’s highest taxing and spending Treasurer’, which has traditionally gone with the job. As Tim Colebatch says in The Age this morning:
IF LABOR made no policy decisions this year and put the budget on automatic pilot, federal spending next year would have been $287,828 million. Instead, after months of work by the razor gang, federal spending estimates have been cut to $287,764 million.
Spot the difference? In net terms, Labor cut federal spending by 0.02%. Its net cuts totalled $64 million — $1 for every $4500 the Government spends.
As Treasury’s historical data shows, there have been eight budgets since the fall of the Whitlam government with lower increases in real spending, four of them under Labor.
Though I am pleased that the FTB B and the baby bonus are to be means tested, this is more a symbolic change than a big saving, with only $173 million less spending in 2008-09 as a result. Those two programs between them will still increase their spending by $707 million, of the nearly $2 billion in total increases to official family payments. The Education Tax Refund, which is effectively an extension of FTB A, adds another billion.
And though I hate to criticise any effort to cut spending, no matter how minor, some of their cuts were very low quality cuts. As Andrew Leigh has already pointed out, the cuts to the ABS will reduce the quality of important labour market information. Among other cuts, the Year Book will not be produced next year. While the information in the Year Book is available elsewhere on the ABS website, it is difficult to find for people who don’t know their way around the various statistical series. Members of the public just wanting a quick fact or figure – many of them from ‘working families’ – are the losers here. This is all to save a trivial $22 million, which on my quick calculation is equivalent to about one morning of family handouts.
I think the cutting of Ministerial and Opposition staff by 30% – saving about $27 million and taking us into the early evening of our day of family handouts – is also shortsighted. Staff burnout is a big issue in politics, and with a man as PM who famously has no regard for work-life balance wit ill be an even bigger issue for Labor than it was for the Coalition. (A Rudd government ministerial staffer recently responded to to my information request in an email timed at 1.23am).
It isn’t a terrible budget, but it is a disappointing one, because the first budget in the electoral cyle is usually the best of the three. It’s downhill from here.