Tough Budget? It’s Tougher to Govern

It was expected that Prime Minister Julia Gillard and Treasurer Wayne Swan would deliver a tough budget, the first budget for the Gillard Government, but there are tougher challenges for the government ahead. (Stefan Postles/Getty Images)

The Gillard Government’s budget may be tough to sell, but with a minority Government, complex policy initiatives to steer through both houses of Parliament and few wins on the board, political analysts say governing may pose the bigger challenge.

The 2011 Federal Budget is the fourth budget for Treasurer Wayne Swan, but the first after the elections for Prime Minister Julia Gillard.

The Government had flagged that it would deliver on a promise to return the budget deficit of around $50 billion to surplus by 2012-13, but there was already an expectation that the budget would be tough.

“You don’t normally see budgets in the first year after an election that are anything other than full of tough decisions,” said Professor Clem Macintyre, Head of Politics at the University of Adelaide, “Governments cant be blamed for that.”

The budget offers support for many struggling sectors of Australia’s 2-speed economy, including tax breaks for small business owners and low income earners; increases in family benefits to keep teenagers in school and more money for the disabled and mentally ill.

Other sectors, however, may find the budget difficult to swallow. Amongst other tightening strategies, there are tighter controls of unemployment benefits, cuts in the Department of the Environment, civilian job cuts in Defence and a reduction in health insurance rebates for high-income earners.

Dr Norm Abjorensen, lecturer in politics at ANU, says it is difficult to say how the electorate will react, but any backlash to the Budget will have to be fought with “a positive message”.

“From what we have seen, that may be beyond the Government’s capacity,” he said.

Dr Abjorensen believes the electorate is confused about what the Gillard Government stands for and leadership is lacking.

“If anything, this Government has the look of defeat about it already and the polls merely reinforce that,” he said.

An Age/Nielsen poll published in April this year had Labor’s primary vote at 31 per cent, the lowest level in 15 years.

Difficult Times

[caption id=“attachment_125464” align=“alignleft” width=“320” caption="The budget offers support for many struggling sectors of Australia