The site was down when it came out, so this is a bit late.

There were several articles on the front page of the Australian. The consensus seemed to be that the budget would fight inflation, but may not have gone far enough. One author thought that the Howard government had responsibility for all the interest rate increases up until now, but Labor will be responsible for any more. The Australian was unusually supportive of the Labor party and several authors indicated they thought the budget was a big improvement on the last few from the coalition, which were little more than vote buying handouts that contributed to inflation.

I've got the paper at work. I'll give you the link on Monday.

Quote:



I don't know who the poison dwarf is and I rarely read Piers Ackerman.   However if I say anything wrong you be sure to correct me won't you.  If you can.   

deepthought wrote on May 18^th, 2008 at 1:13pm:


OH sorry I thought you followed politics, the HON PJ Keating named Glenn Milne the poison dwarf years ago. Your wise not to read pies porkys ,some of his storys take fiction to a higher level.

The four front page articles are linked below. The only other thing on the front page was a dot point summary and photo.

main story:

Mild budget cuts as Treasurer delivers all poll promises

http://www.theaustralian.news.com.au/story/0,25197,23695702-601,00.html

WAYNE Swan has taken a knife to John Howard's middle-class welfare in a budget delivering Kevin Rudd's election promises in full and banking $41 billion to spend on health, education and infrastructure.

The Treasurer also delivered a greater-than-expected $21.7 billion budget surplus, worth 1.8 per cent of GDP, which he said should satisfy the Reserve Bank and reduce pressure on interest rates.

And in another major departure from the approach of his predecessor, Peter Costello, Mr Swan said he would invest the budget surplus - which dwarfed the Treasurer's target of $17 billion - as part of $41 billion to be locked away in three new investment funds for use in the future.

The $20 billion Building Australia Fund, the $10 billion Health and Hospitals Fund, and the $11billion Education Investment Fund would not be used this year to avoid placing further pressure on inflation by putting money into the economy.

The decision to quarantine the money and delay spending is in line with Labor's central economic argument that reckless spending by the Howard government was partly responsible for eight consecutive interest rate rises to the current 12-year high of 7.25 per cent.

But Access Economics director Chris Richardson warned last night the measures might not be enough to curb inflation. "The risk is that the economy will continue to travel faster and that interest rates won't have been successful in slowing much of Australia," he said. "They will hurt a bunch of people, but lots of Australia is still travelling at speed. The risk is the economy grows faster, employment grows faster, wages and prices grow faster and, even with the cuts in this budget, interest rates may have to go up."

Mr Swan said he found the notion of high-income earners being paid government welfare "impossible to defend on any grounds". "For too long, working families have watched the proceeds of the boom directed elsewhere in the form of tax cuts skewed to those already doing well," Mr Swan said.

In his speech, Mr Swan said some Australians had been asked to bear a greater burden than others. "But in the end, if we're to beat inflation and build prosperity, we have no choice. We simply cannot go on as before, spending irresponsibly and allowing inflation to build."

---

RHS of front page:

Trade-off will make or break Labor

The optimism is mirrored in Wayne Swan’s declarations that the budget “is designed to fight inflation”, while “we tip the scales in favour of working families”. This is a high-wire act. It will finish either in a standing ovation or a fall. From this point, any interest rate increases will be owned by Labor.

The surplus of 1.8 per cent of GDP is the highest ratio for nearly a decade. Spending growth has been cut by two-thirds from Howard’s last days. All Labor’s new spending is offset by spending cuts.

The budget reality dismisses the phoney symbolism of recent days. This is not a Robin Hood budget. It is not an attack on middle-class welfare. It does not involve a major dismantling of Howard government programs. Indeed, the spending cuts are careful and targeted to minimise electoral backlash.

Labor can boast a superior fiscal discipline than existed in Howard’s last years and deeper support for fairness via limited means-testing.

---

Bottom left:

Pressure will remain on monetary policy

http://www.theaustralian.news.com.au/story/0,25197,23695703-30538,00.html

According to Wayne Swan, Reserve Bank governor Glenn Stevens will be happy with the outcome.

Stevens is unlikely to contradict him, certainly not publicly, and in any case would probably agree with Swan's description of the fiscal stance of his first budget as "a mild tightening".

However, it is also true that it could have been much worse, and on its track record in its final years, under the Howard government it would have been.

By quarantining the revenue windfall, as it promised, the Government has allowed the budget's economic stabilisers to work.

As for Swan's promise of a new era of economic management, the budget is heading in the right direction, but it will take more than one budget before we can sensibly make a judgement on how successfully it will be delivered.

---

Bottom right:

Spending slayer more a prodder

http://www.theaustralian.news.com.au/story/0,25197,23695700-5017094,00.html

WAYNE Swan wants to feel your pain. The Treasurer may still be talking tough on fighting inflation but his budget figures reveal a decidedly more gentle touch.

Even the first response was not 'it's good', but rather, 'it's OK, better than what we had under Howard, and could have been a lot worse'.

In any change there will be winners and losers. The losers are always the loudest, and people have a tendency to focus on what they lost and ignore what they gained.

freediver wrote on May 19^th, 2008 at 7:57pm:


Most think it stinks and I agree with them.  Look at the first statement "Nearly 70 per cent of households with children fear they will end up being worse off or are unsure about the Budget"

That's not even OK when 70% of the 'working families' Plastic Wayne droned on about last week fear they will be worse off or are unsure about their future with this allegedly 'working family' oriented budget.  Economists can bump their gums all they like and moan about internalising externalities but that kind of mumbling means nothing when the household budget creaks with dismay in Cardboard Kev's Liebor Horrorland.

John Howard created a world class economy that Australians prospered under - Cardboard Kev and his Merry Manglers are destroying it.  And the people agree.

Welcome to OzPolitic Alex.

Even the murcury is plugging Rudd, who manages to be both 'fiscally responsible' and politically canny, unlike Nelson who can only manage cheap populism.

http://www.news.com.au/mercury/story/0,22884,23712385-5006550,00.html

But, look at the fine print a bit, and it becomes clear that Mr Swan and Prime Minister Kevin Rudd are not just being fiscally responsible in making these mega-cuts to political office staff.

There is a fair bit of hard politics being played too -- because the 33 per cent reduction only applies to "ministerial and Opposition staff".

That is, every politician who is not a Labor representative -- be they senators or House of Representatives members, Liberal or National Party -- is about to lose one in three of their political advisers and personal staff.

---

http://www.crikey.com.au/Politics/20080521-The-25-billion-debt-and-expansion-and-tax-cut-that-wasnt-in-the-budget.html#comments

The $25 billion debt expansion and tax cut that wasn’t in the budget
Stephen Mayne writes:

The Rudd government took budget leaks and spin to a new level ahead of last Tuesday’s budget, but yesterday we discovered the media manipulation extended to actually delaying important debt and tax announcements until after the budget.

Wayne Swan blithely slipped out this release yesterday revealing that Federal debt would be expanded from $50 billion to $75 billion and the 10% withholding tax would be abolished on state government debt.

Think about it for a moment. Shouldn’t that announcement have been made last Tuesday night? Balance sheet management and tax cuts are the bread and butter of budgets but the Labor spinners clearly didn’t want any media focus on Commonwealth debt, let alone a $25 billion expansion.

It worked a treat as the tabloids missed the yarn. The Australian’s John Durie was the only commentator who weighed in, including this telling disclosure:

State government paper on issue has increased by some 40 per cent over the past five years and some 66 per cent of it is sold to offshore investors.

So there you have it, the biggest contributors to Australia’s soaring $610 billion foreign debt in recent years have been Labor state governments and now they’ve got a much more expensive refinancing exercise given the global credit crunch.

It’s hard not to see yesterday’s announcement as part of a continuing state government bailout. State debt is rising so quickly that we’re now seeing desperate privatisation moves in Queensland and NSW and increasing numbers of public private partnerships on hospitals, roads and other normal state government functions.

The Building Australia Fund, along with the health and education funds, was Federal Labor’s first move to relieve the cash-strapped states of these burgeoning infrastructure bills, the sort of bills which come with a booming economy and fast growing population.

Now we’re seeing tax breaks on state debt for foreign lenders at a time when the various Labor governments are going cap in hand like never before.

Swan’s announcement also included this:

Because of the additional resources to be held by the Australian Office of Financial Management, the Government will change its investment powers to allow it to invest in a broader range of assets than under its current mandate. At present the AOFM invests in term deposits with the Reserve Bank.

What odds that will include state bonds? Are the Feds borrowing an additional $25 billion that will be on-lent to their state Labor mates?

At least the announcement will hopefully force journalists and commentators to admit the Commonwealth does carry some debt, rather than produce lines like this from George Megalogenis in The Australian last week:

Mr Swan is the first treasurer in history with no commonwealth debt to cover. There is no borrowing to pay off.

Err, no. Labor left behind a $96 billion debt in 1996, Peter Costello paid almost $50 billion back and now Labor is pushing it back up to $75 billion. Sure, you have to also consider the asset side of the Federal balance sheet, but can we also please stop pretending there is no Commonwealth debt?

---

the press release:

http://www.treasurer.gov.au/DisplayDocs.aspx?doc=pressreleases/2008/058.htm&pageID=003&min=wms&Year=&DocType=&source=cmailer

Increasing Commonwealth Government Securities
To Bolster Australia's Financial Markets
Today I announce that the Government will increase its issuance of Commonwealth Government Securities (CGS) as part of the Government’s commitment to the effective operation of Australia’s financial markets. 

The Government’s decision to increase issuance follows consultations with market participants about the adequacy of the supply of CGS. 

The Rudd Government is committed to ensuring that Australia’s financial markets continue to perform strongly and are a leader in the Asia-Pacific region.  The Australian Government’s budget surpluses mean that we do not need to issue securities to finance spending, but Treasury Bonds play a special role by providing the lowest-risk, highest-quality instrument in financial markets. 

Because they are risk-free, Australian Government Treasury Bonds are the benchmark used by participants in Australia’s financial markets to set interest rates beyond the short end of the yield curve, including in the bond futures market.  The Australian Government is committed to ensuring that its bon