Too-timid Egan Rests On His Oars
Sydney Morning Herald
Tuesday May 21, 1996
Because almost 40 per cent of the State's revenue comes from the Commonwealth, it makes no sense for the State Budget to be delivered three months before the Federal Budget - particularly since we know the States' grants are on the chopping block.
But that's the point of jumping the gun. Mr Egan wants no-one to be in any doubt that the other, bad half of the Budget is brought to us by John Howard, not Bob Carr.
Yesterday's exercise in pre-emptive blame-laying is an ominous sign that the unpopular Mr Carr plans to do little to shield us from the depredations of the popular Mr Howard.
He's hoping that, come August, the popularity labels will be reversed.
In the meantime, we can take the State Budget only as we find it. And what do we find? An innocuous document, perfectly crafted to fit the Carr Government's shaky political position.
No nasty tax increases or spending cuts that would annoy the voters - indeed, a lovely little tax break on mortgage refinancing, plus increased spending on health and community services.
But at the same time, a balanced Budget to satisfy economists and the big end of town.
How was this attractive double so easily attained when Mr Howard is having such a struggle with his Budget?
Partly by enjoying the full-year effect of the spending cuts made in last year's Budget.
But partly by fudging the figures - including in the calculation of the underlying Budget balance items that should have been excluded, such as about $400 million in asset sales and $200 million from the bizarre "cross-border refinancing" (which boils down to a donation from the US taxpayer).
And partly, of course, by assuming the Commonwealth's grants will sail on as before.
There's one word to describe this Budget: coasting. Mr Egan hasn't been rowing, he's been resting on his oars. Though this Budget looks OK, the ones coming behind it don't look flash.
Mr Egan should have been rowing now - doing more to tighten up the State's recurrent spending - so that he could do his coasting closer to the election in March 1999.
Since it's a safe bet that Mr Carr will want to be doling out goodies in the run-up to the election - and certainly not heaving on the oars - the State's budgetary position is likely to deteriorate from here on.
© 1996 Sydney Morning Herald
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