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aliaNEWS - a broadcast e-list to the library and information sector 14 May 2003
In this aliaNEWS broadcast:
It's Library and Information Week!
Federal Budget 2003 analysis summary Just let 'em feel that you can save 'em something on taxes and nobody will keep you out. - Warren Buffett Mid-term Budgets are often the least interesting - especially when Government's are well-established. A treasurer's standard approach to the electoral cycle is: do the hard stuff in the first Budget; don't scare the horses in the second; offer a lump of sugar in the third so that they rush to vote for you in the election which follows. That's the theory. In practice, the unexpected sometimes turns up. When the smokey is a mid-term tax cut, it usually means one of three things: the Government is in trouble; the Government feels an early election coming on; or by spending its money now, the Government wants to prevent its Opposition spending it later. Whichever, surprise is of the essence. And it helps to have a distraction. So this year Peter Costello must have been overjoyed to find that his Labor opposition have created the smokescreen for him. Who can recall a year when - even before its delivery - the Budget was already dwarfed politically by the Opposition Leader's response to it? Once Kim Beazley announced that Simon Crean's speech in reply would determine his fate, Crean in the Colosseum became the main political game for what Joh Bjelke Petersen used to call 'the chooks' of the media. The Governor-General's travails reduced the focus on this year's Budget still further. And then the Indonesian government kindly began the Bali bomber trial this very week. Not since Elvis died on Budget Eve in 1977 has Budget anticipation been so overshadowed by other events. Mr Costello won't be complaining. While attention has been directed elsewhere, he has been able to get on quietly with the task of presenting a clever but cynical Budget. He has handed back only a tiny portion of his bracket-creep windfall. But in doing so, the treasurer has neatly positioned the Government for a tax-cut-centred poll later this year - when Crean, Beazley and the ALP could be drowning in blood and gore. And if his prime minister decides to go full term, the Opposition is nicely hedged in by his spending much of the surplus this year. In trying to develop an attractive program, Labor will inevitably face the old cry of 'Where's the money coming from?' The Budget spends heavily on defence and security which will be electorally-popular too. The costs of war in Iraq are met with additional spending of more than $2 billion over five years. Total defence spending rises to more than $15 billion. Yet for all its superficial political attractions, there are potential vulnerabilities. The Budget's controversial changes to Australia's health system were made public well ahead of Mr Costello's speech. They are certain to increase costs for average families and to date seem unpopular. Now they are joined by radical plans for overhaul of higher education which threaten many students with sharply-higher fees. Both offer an electoral lifeline to the Opposition if it can move beyond internal brawling; both face difficulties in the Senate, which might add fuel to any early election fire. And there are disappointments. There are no measures to assist Australians balance work and family responsibilities, despite recent Government pronouncements on the subject's importance. There is silence on maternity leave. Overall, Mr Costello will be pleased with himself. Thanks to huge increases in taxation revenues, he has been able to meet many competing demands and still claim a $2.2 billion surplus - quite a platform from which to boast of further sound economic management. A solid surplus AND tax cuts is something few of his international counterparts can even dream of. And this has been achieved despite the high-profile challenges of war, drought and fire. So far, still calm for the good ship Australia whose captain can add an armour-plated 'economic miracle' to his new man-of-steel image. But storm clouds gathering over the world economy will have the treasurer casting nervous glances at the horizon. The US federal reserve is growing increasingly concerned about deflation; Europe and Japan are struggling; sharemarkets everywhere remain sluggish despite the quick victory in Iraq; the SARS outbreak is hitting Asian industrial activity hard; and international airlines and tourism are in a parlous state. The conjunction of these negative factors does not encourage optimism about the direction of the world economy. The Budget has marked forecast growth down to 3.25%. While this remains a thoroughly respectable number, it will mean little if the world in general - and the USA in particular - turns seriously downward. Mr Costello will be crossing fingers, toes and everything else against such a development. In a nutshell
A budget surplus of $2.2 billion
Just a reminder: for the complete report (3500 words) please view the full document on ALIAnet at http://alia.org.au/papers/budget.analysis/2003.html - there is much more to read!
Exciting news to come!!
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