Common threads connect trans-tasman economic strategies

By GREG ANSLEY

CANBERRA - A common market across the Tasman may still be in the far distance, but more than a thread of common thinking connects the economic strategies of Finance Minister Michael Cullen and Australian Treasurer Peter Costello.

While the specifics differ, both have aimed directly at families in respective budgets that have more than a whiff of vote-hunting in them.

Costello's need to win middle Australia to his side is more urgent, with an election some time this year and a steadily eroding level of support for the Government in opinion polls.

The Clark Government will not face voters until next year.

In the "barbeque stopper" budget he presented two weeks ago Costello dangled family programmes, tax cuts and superannuation measures worth A$37 billion over five years in front of voters.

Cullen eschewed tax cuts or higher income thresholds, but like Costello increased family assistance measures and gave a boost to child care.

But unlike Cullen's focus on low- to middle-income families, Costello spread the goodies across the board, providing new maternity benefits and easing access to them, providing another 40,000 child care places, and more help for aged care.

Lower-income families gained from a revamp of family tax payments, and middle- and high-income earners won most from tax cuts delivered through the raising of income thresholds.

The package of measures is calculated to put an extra A$117.77 a week in the hands of a dual-income family with three children - one under five and two aged between 5 and 12 - earning A$55,000 a year.

In contrast, a working family in New Zealand with two children earning around $40,000 will get an income boost of around $40 a week in April 2005. By 2007 the assistance will rise to $114 a week.

Cullen did not follow Costello's lead in suggesting that now it was easier to have children couples should leap into bed and procreate for Australia.

"If you can have children it's a good thing to do - you should have one for the father, one for the mother and one for the country, if you want to fix the aging demographic," Costello said, urging Aussies to do their patriotic duty.

And while the military barely rated a mention in New Zealand, Australia pushed its defence vote up by A$1.8 billion over four years to A$16.35 billion, adding new weapons and equipment and spending lavishly on counter-terrorism agencies and measures.

But reaction to Costello's budget suggests that voters are a pretty cynical and savvy bunch who may like the carrots but are not prepared to sell their soul for them.

While about half believed the budget would be good for the country and almost a third thought their own finances would benefit, the Government has continued to slide in the polls and is now trailing well behind Labor.

Unions attacked Costello's budget for "squandering" taxpayers' money on vote-buying at the expense of the Medicare health system and education, the Australian Council of Social Services slammed tax cuts for upper income earners as "obscene", and doctors bemoaned the lack of "real money" for general practice of primary health care.

"It's a political patch-up job, a short-term fix for the next election," Labor Leader Mark Latham said.