http://news.smh.com.au/national/govt-issues-warning-to-senate-20080612-2p75.html

The federal government has again warned of consequences for the opposition if it blocks key budget measures in the Senate.

The government wants to pass 39 pieces of legislation relating to Labor's first budget in the eight parliamentary sitting days remaining before the lengthy winter break.

But the opposition, which still controls the upper house, has indicated it may stand in the way of some of those measures.

Government Leader in the Senate Chris Evans said delay would cost the government $300 million in lost revenue.

"If they say six months after losing an election that they're going to frustrate our capacity to keep downward pressure on inflation and interest rates, that will come down on their heads," Senator Evans told ABC television.

Asked whether he was hinting at a possible double dissolution election, Senator Evans said: "This is not about double dissolution elections, it's about a budget.

"I think the public will understand they are fundamentally undermining the government's capacity to deliver the sort of economic program we promised to deliver."

Senator Evans said the government was not asking for anything unrealistic.

"Every other government has been able to get its budget through by the end of June."

"This is about the government being able to deliver its budget, it's not about complex pieces of legislation or broad social issues."

---

Coalition delays budget car tax hike and gay law change

http://www.theaustralian.news.com.au/story/0,25197,23883745-601,00.html

LUXURY-CAR buyers face a reprieve from July 1 tax hikes but same-sex couples will have to wait longer for the removal of legal discrimination after the Coalition used its Senate majority today to delay budget measures.
The Rudd Government has accused the Coalition of economic vandalism after it delayed the introduction of budget measures contributing over $200 million to the surplus.

"We need a strong surplus to fight inflation and invest in the future but today the Liberals failed a very important test on economic responsibility,'' Mr Swan said in a statement to The Australian Online.

"By blocking parts of the budget in the Senate they proved that, given the choice between responsible budgeting and cheap politics, they will choose cheap politics every time.

"Their political game-playing will see $284 million come directly off the budget surplus - and $22 million in lost revenue from the luxury car tax changes alone.

Eleven budget-related bills were today referred to Senate committees, scuttling the Government's plans to have the draft laws passed by the end of next week.

Measures to be examined by committees include an end to the 31-year-old excise exemption on condensate, the national FuelWatch scheme, plans to lift the Medicare levy surcharge threshold and the luxury car tax changes.

---

RBA not so reserved as Labor gets a tick

http://business.theage.com.au/rba-not-so-reserved-as-labor-gets-a-tick-20080617-2s84.html

CAN you hear that cheering in Canberra?

The Reserve Bank has given Labor's first economic blueprint an effective tick of approval.

In a shift away from the typically subtle central banker speak, the RBA said at its June meeting that the board believed Wayne Swan's first budget as Treasurer was "mildly contractionary" because of the build-up in the surplus.

This is a significant endorsement for Labor.

Central bankers are notoriously shy of directly reacting to a government's budget. The best Australia has had in the past were guarded comments from Ian Macfarlane that some of Peter Costello's tax cuts could add stimulus to the economy.

It was left to the observer

to extrapolate that, given the economic conditions at the time, the governor was none too pleased that demand was being pumped into the economy when his job was to cool it down. Macfarlane never clearly said that though; it was up for interpretation.

The Glenn Stevens approach is more direct: "Measured in terms of the change in the surplus, fiscal policy was expected to impart a mildly contractionary effect on the economy in 2008-09."

There goes the Opposition's budget attack. Brendan Nelson and Malcolm Turnbull have taken the approach that Labor's first budget was a high-spending, high-taxing return to old-fashioned Labor economic management that would put pressure on interest rates.

But the RBA has knocked that contention out of play. The emphasis on "mild contractionary effect" is significant.