Large chunks of money are being thrown at the entire population in a budget which makes only the smallest pretence at being about structural reform or economic management.
John Howard and Peter Costello think two things could finish their run in office: Mark Latham and a housing crash.
This budget will have them donning the world’s biggest and most expensive underpants to counter both threats.
How big a threat is Latham to the coalition? The budget allows you to put a price on it: $58 billion or around three times the price they put on beating Kim Beazley in 1998 and 2001.
That’s right, $58 billion. That is how much this government has spent in tax and spending decisions since the last budget, and $51 billion of that has been since the mid-year budget review (about the time Latham took over the Labor leadership).
That compares with the $20 billion they spent in 1998 and the $25 billion they spent in 2001 which, in their time, were seen as setting new standards of excessive pork- barrelling.
The difference this year is that there hasn’t been the effort to throw individual wads of money at particular groups of disgruntled voters.
This time it’s more brazen: exceptionally large wads of money are being thrown at the entire population in a budget which makes only the smallest pretence at being about structural reform or economic management.
All that talk about necessary pain to address intergenerational inequities, cutting pharmaceutical costs and disability benefits, has been replaced by an alleged solution which argues giving everybody big handouts now will actually solve the problem of our ageing workforce in 40 years time.
The politics of the budget are simple. It has been Latham who has largely dictated the political agenda since his ascendancy to the Labor leadership in December last year.
The budget’s massive family payment and tax offerings throw the Opposition Leader’s agenda back in his face and test his skills and those of his team to compile a comprehensive and rapid response which is both politically and economically flaw-free.
Labor has mounted a relentless attack on the flawed structure of the family tax payment system, under which hundreds of thousands of families have unwittingly incurred unmanageable debts.
Belatedly, the government is buying off the widespread resentment about these problems with a one-off payment of $600 from the current year’s budget and daring Labor not to support the legislation through parliament by June 30.
Peter Costello says Labor can’t “cherry pick” his budget because if it tries to fiddle with the family tax payments, the Labor constituency of low to middle income earners will lose out while higher income earners will be the biggest winners from tax cuts.
The government is offering voters the lure of three separate lumps of money between now and around the end of September, the most likely window in which an election will be at least called, if not fought.
Labor is faced with the choice of supporting the measures and having no major policy alternative to offer; trying to modify the package and losing people in the detail; opposing it and trying to offer voters something completely different, possibly a
more-services, fewer-tax-cuts model.
Its problem is that the government’s strategy maximises the pressure for a quick alternative.
If the Senate does block what would be a popular package it sets the scene for a confrontation with the upper house which the coalition could use to try to boost its vote at either a normal half-Senate election, or, if the trend is heading in its direction, a double-dissolution poll.
After all, the government still has all of that stalled agenda from the privatisation of Telstra to disability pension and industrial relations dismissal reform which it would still love to ram through the parliament after eight years of frustration.
Whatever sort of election we face, the budget is designed to scare the tripe out of Labor that it will be an early election.
The economic forecasts suggest Howard has increasing reasons to go sooner rather than later.
The economic feel-good factor which has been the backbone of the coalition’s success, driven by booming housing prices and a consumption binge, is about to come to an end, possibly with a sickening shudder, according to the budget papers.
Events in Iraq are closing in on Howard, as is the economy.
The reasons to indulge his normal caution in holding on as long as possible are rapidly disappearing.