Budget may not be enough to win back voters

Australian PM Kevin Rudd and Treasurer Wayne Swan. Photo / Getty Images

If Prime Minister Kevin Rudd and his Treasurer Wayne Swan are to be believed, Tuesday night's Budget had nothing to do with politics.

Instead, it was all about duty, responsibility, and the need to ensure that Australia's survival through the global financial crisis is leveraged into long-term prosperity.

But from the time Swan rose to deliver his Budget speech everything was political.

Yesterday the senior members of both the Government and the Opposition were saturating television and radio with their versions of Rudd's economic management.

The Government is lauding its performance through the crisis and the delivery of a Budget shaping an economy that it says is the "envy of the developed world".

The Opposition describes the Government's figures as "rubbery", with leader Tony Abbott declaring that Australians would not be mugs enough to believe Labor has "morphed from Paris Hilton to Uncle Scrooge".

And this is the nub for Rudd: after so much recent disillusionment, so much bungling and backflipping, and so hard a fall in the polls, can he use this Budget to convince the nation he really does deserve another three years in power?

The Budget is a central plank in the Government's strategy for this year's election, and its reception will be crucial for Rudd.

An admittedly rough and probably unreliable guide has given an early indication Labor will still have its work cut out to reverse the dramatic fall in popularity that in four new polls has placed the Coalition ahead of the Government.

A poll on www.news.com.au yesterday had 67.4 per cent of participants rejecting the Budget. A Fairfax poll reported approval edging ahead at 51 per cent to 49 per cent.

Rudd has won sound support from the unions, with Australian Council of Trade Unions president Sharan Burrow declaring the Budget good for workers, the economy, and future generations.

"It is a traditional Labor Budget that delivers tax cuts, better quality healthcare for a changing population, and higher superannuation for working people," she said.

But many embraced by Labor's core constituencies are not convinced.

"You don't build a strong economy on the back of a fractured society," John Falzon, chief executive of the social agency St Vincent de Paul Society, said. "This Budget fails to heal the fractures."

Falzon's views were echoed by similar organisations, family relationship counsellors, and students.

"The Treasurer's zeal for a 'fiscally responsible' Budget has seen Australians living at the margins largely forgotten yet again," Anglicare Sydney chief executive Peter Kell said.

The Budget's confirmation that Rudd has shelved his proposed greenhouse emissions trading scheme has also alienated support. It's replacement with a A$652 million ($814 million) plan to boost renewable energy was welcomed by the green energy industry, but condemned by environmentalists.

It has also confirmed the anger of the Greens, whose support the Government needs in the Senate and who are attracting a significant proportion of the Labor supporters abandoning Rudd.

The Greens could increase their numbers in the Upper House, and pose a more credible threat to Labor's vulnerable Lower House seats: Finance Minister Lindsay Turner has a serious Greens challenge in his Melbourne electorate.

Rudd continues to face opposition to his plans for a 40 per cent "super tax" on miners, which the Budget confirmed would be imposed from July 2012.

The miners' anger, backed by Abbott's pledge to campaign against the tax during the election and if necessary try to block it in the Senate, presents a serious threat to the Budget strategy and Rudd's credibility.

Rudd and Swan yesterday denied their forecasts of a debt-free Budget within three years - and promised health reforms, higher superannuation for workers and lower company taxes - relied on a tax windfall from miners.

But the billions that will flow from the tax are crucial to the Budget and the Government's longer-term strategy, and the Opposition will be using growing voter distrust in Rudd to run hard on the theme that he is using smoke and mirrors to cloak the reality of a big-spending, debt-addicted administration.

"The Budget is a house of cards," shadow finance minister Andrew Robb said.

Rudd has just months to convince voters otherwise.