A budget to make or break

The 2012 budget will end up as the final and decisive marker in the current political contest, and beyond the 'dodgy surplus' Gillard and Swan need a powerful narrative to sell it to the country.

Will the Brown-less Greens present the Gillard government with a chance to claw back its shrinking and barely beating heartland?

The answer is: no one knows.

ALP critics, ex-leaders, ex-followers and analysts have for months been lining up to kill the carcass. They’ve struggled to have a supporting word for Gillard or her ministers.

Generally, commentary on Gillard’s plight has squashed news. There’s rarely been a news item published without the obligatory accompanying personal opinion. Murdoch tabloids have continued to wage a relentless and openly skewered and politically damaging front-page war against the carbon tax.

Of course, as we all know, the nation is also in crisis – a jobs crisis, a crisis of confidence, a leadership crisis, a debt crisis and a border security crisis. We read about it every day. Don’t worry about the unemployment rate, what about the sackings or state versus state numbers?

The endless polls tell the same story. The ALP’s core constituency is ebbing away. It has drifted measurably to the Greens.

It’s clear that Gillard and her ministers know the score. It’s in their language and often defensive demeanour. They grind away with some decent public policy: witness the 'green tape' and skills package negotiated at a productive COAG – but it’s generally lost in the excitement of pure politics.

No, the real issue for Gillard is not news or commentary about domestic political figures; rather it’s centrally about the health of the economy and the national mood.

That’s why the 2012 budget – now being framed – will end up as the final and decisive marker in the current political contest. It will be a marker that seals the fate of the Gillard government – one way or the other.

There are no second chances. Next year’s budget will be too late.

This means that it won’t be the standard Treasury document. It will be a political line in the sand job – a "Labor way” budget, as Gillard now describes it, for working class Australians.

It will be a budget that Gillard and her ministry will seek to portray as 'our' values against 'their' values.

At its core it won’t be about dollars – although it will forecast a contentious and dodgy surplus; it will be about the kind of country you want.

It will be a message about 'fairness', a 're-distribution of wealth for all to share' and a hard and overdue look at middle class welfare. It will be an appeal to Australians to look at the kind of country they want for their kids.

It will aim directly at the hearts and minds of millions of red-tape strangled small businesses – the base constituency of the Liberal Party.

Tony Abbott is already effectively laying out the ground for his budget attack. Its figures will be phony, and its targets will be aspirational Australians. We will remain mired in debt. And big government is strangling growth and productivity.

Abbott has mastered opposition. He’s disciplined (generally), on-message and never far from a camera or an accommodating radio mike. He’s forcing the government to play catch-up, even in these weeks without the parliament in session.

In the coming days before the budget, the leaks (true or untrue) will allow the Opposition free rein to attack waste, incompetence and the harsh treatment of aspiring Australians and business everywhere. Gillard and Treasurer Swan will simply bat away inevitable questions about 'reports' – one paragraph at the end of a story.

Come budget presentation night the government’s standing will be even weaker.

History has shown that the political effects of budgets rarely last more than a few days. There are acres of commentary, graphs and argument. But it all comes down to how the budget measures affect individual families. Am I better off or worse off? Will my weekly bills rise and fast as my income? What benefits will I lose? The question rarely asked: is this good for the country?

However, it’s now likely the 2012 'line in the sand' budget will be one for the ages. It will be about long-term nation building. It will be about less government – not more. It should be.

Expect some big surprises – especially in defence spending priorities, levels and targets.

The political ramifications will play out over time. But what’s very clear is this: if Gillard and Wayne Swan and Penny Wong and Anthony Albanese don’t have a big and powerful narrative to wrap around the document – and they sell it piecemeal, portfolio by portfolio – then their fate is sealed.

If that happens, then come winter there will be discontent – and rumblings again about leadership. That’s the way this tough game works. It will have nothing to do with Bob Brown.

Alister Drysdale is a Business Spectator commentator and a former senior advisor to Malcolm Fraser and Jeff Kennett.

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