Australian political debate moved onto economics turf yesterday, with Wayne Swan announcing Treasury’s revised budget forecast figures.
Taking into account upgraded figures for commodity prices, the numbers aren’t half bad – especially given the country is still expected to return to surplus in 2012-2013.
But yesterday’s news did not provoke a flood of positive reports for the Gillard government, who, as recent polls have suggested, could do with a boost in perceived economic credibility.
Why weren’t the media unanimously singing the government’s praises? Because Swanny’s new figures ended weeks of speculation about concessions Labor made to its controversial mining tax, letting the cat — or the coal — out of the bag on exactly how much of the original revenue was slashed in order to appease Twiggy Forrest and his deep-pocketed pals.
This is a time in which economic strength will – or should – become a major talking point for Gillard and the government. Kevin Rudd’s communication weaknesses cut both ways: he may not have been able to effectively “sell” many of his policies, just as he wasn’t able to convincingly talk up some of his government’s commendable achievements.
You can best bet Gillard doesn’t want to make the same mistake. But before she can enter full tilt economic salesperson mode, the pundits will invariably dissect yesterday’s forecast, commenting on the nation’s economic health and asking questions about the nature of Gillard’s rejigged mining tax. Well managed or mismanaged? Cave-in or compromise? Here’s what the commentariat are saying:
Crikey
Bernard Keane: New forecasts – domestic growth down but the foreigners love our dirt
In short, the mining boom is taking off again and propelling government receipts onwards and upwards. The only thing the Government has to do to return quickly to surplus is keep a lid on spending, the one thing this Government has been good at outside its stimulus packages in 2008-09.
The Australian
David Uren: Jullia Gillard’s $7.5bn gift to miners
Miners won $7.5bn in concessions under Julia Gillard’s “breakthrough” deal with the industry – five times more than the government has admitted.
This is according to new figures that reveal Treasury massively underestimated takings from the super-profits tax.
Michael Stutchbury: Back in the black: it’s all a bit too cute
Strike me lucky: Wayne Swan’s belated confession of a $7.5 billion mining tax backdown would have destroyed his budget surplus promise – except that the mining boom is even bigger than he could have imagined two months ago.
David Uren: Consumer caution curbs Treasury’s growth estimates
Weak consumer spending has forced Treasury to cut its growth estimates for the economy, despite the surge in commodity income.
Economic growth is not expected to pass 3 per cent this year and will fail to reach the predicted 4 per cent in 2011-12, according to the latest Treasury forecasts.
The Age
Tim Colebatch: Mining tax revenue is a guessing game
”Where is the money coming from?” the Coalition wants to know. How can the government reduce the revenue base for its mining tax so drastically, yet reduce the revenue forecasts so little?
Malcolm Maiden: Economic news good for Labor
Wayne Swan’s economic statement and the stunningly strong consumer sentiment numbers for July that were also issued yesterday will help Labor’s macro-economic management claims in the coming election campaign.
Sydney Morning Herald
Lenore Taylor: Looks too good, if it’s true
If Treasury’s new estimates of the budget booty from the tax are right, then yesterday’s economic statement is a solid basis for the Gillard government’s election campaign.
The Advertiser
Mark Kenny: Budget surplus to balloon to $3bn in three years
Forced on to the back foot over the revelations, the Government argued the proposed RSPT was never implemented and implied it would have adjusted down the tax’s rates if too much money had begun flowing into federal coffers.
The Punch
Leo Shanahan: Yeah but, no but, Swan explains
Listening to Wayne Swan’s press conference to update us on the state of the economy yesterday it was as if Little Britain’s Vicky Pollard had been asked to explain our finances.
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