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29 May 2008

Federal Budget 2008 - Rudd and Nelson

There is a lot of relief from Labor voters that Rudd is proving to be a good Labor man, and that this is a good Labor budget that honours promises and looks towards the future. Coalition voters by contrast think that he lacks substance. Just as “honesty” was the cry of dyed-in-the-wool Labor supporters during their exile, “spin” is likely to be the cry of dyed-in-the-wool Coalition supporters as they wander in the political wilderness.

You can download the map of attitudes to Rudd by clicking here, and to Nelson by clicking here.

Contrast this Labor voter:

"Even though I am a Labor voter, I had Kevin Rudd pictured as a somewhat uninspiring bureaucrat with a savvy media image. The budget dramatically improved my assessment of him as a genuine Labor Leader"

with this Coalition voter:

"Kevin Rudd is all talk and no action. Before the election he gave the impression that he could drive down inflation and the cost of living. It is now obvious that he can't."

Nelson suffers from two major handicaps - the former Howard government and Malcolm Turnbull. While the top ranking concept is "Nelson" it appears mostly as a negative. The discussion is about his future or his performance rather than the budget. He is seen as lacking substance so is defined by what he inherits, or what he is not.

There is also a large degree of entrenchment of views. "Vote" is the second strongest concept which appears either in the context of "I always vote Labor" or "I always vote Liberal". In other words, Nelson is relevant only in so much as he is part of the institutional arrangements. This is to be expected. We've just had an election (six months is "just" to the average voter) so the budget is going to have a minimal impact on perceptions because elections, particularly those when you change government, are psychologically decisive. We don't want to go and revisit the decision too soon afterwards.

Posted by Graham at May 29, 2008 05:53 PM

Comments

In relation to subsidies on solar power. Malcome Turnbull released the Coalition's policy last year on this. In their policy press announcement, they said that the solar power subsidy will be means tested and cut out at $100,000. So, it would seem that the Coalition also believed that people on incomes of $100,000 plus were well off.

Posted by: Dee at June 7, 2008 09:18 AM

I am disgusted with the Budget. When did someone earning 100,00.00 become wealthy. I feel sorry for the people who had hoped to install Solar heating. To save on their energy bill and to help the enviroment. What about the people who have lost their jobs.
People seem to forget that before the Liberal government could even start they had to pay back 96 Billion Dollars of labour debt.
Julia Gillard really gives me the creeps. I cannot forget how she followed Mark Lathm around like a puppy dog during the 2004 Labour campaign.
Remeber her wonderful idea of a Gold Medicare card for all. Imaging the debt that would have caused.
The Rudd government have set up so many consultations and reviews. No wonder they have to fire so many Public Servants. These people have all to be paid.
I wonder that Labour followers are not concerned that 134,000 people will be loosing their jobs.

Posted by: Hazel Perry at June 6, 2008 05:18 PM

Cutting fuel exise (either via the Nelson or the Rudd model) to deal with the rising price of petrol is like dealing with obesity by letting out your belt. Not only would the effect on people's pockets be minimal, but it would be diverting resources to supporting unsustainable practices rather than developing sustainable ones.

The price of petrol is hurting most people, but it's going to get much, much worse. Even us non-drivers will end up paying for the higher oil prices sooner or later. The issue is what to do about it. People need to be given alternatives to driving. We need much better public transport (both in quantity & reach of service) and much denser cities & towns (though if we leave it to the developers to drive it, we're asking for trouble).

The performance of both Rudd & Nelson on this issue is disgraceful. And I have only one comment for Peter Garrett: Short Memories.

Posted by: Greg Platt at May 30, 2008 09:13 PM

Well, if people really thought about Nelson's idea for temporary relief on fuel prices, they would see it for what it is BS. I have a 68 litre tank. I would save a whopping $3.40 pw. One report said the average saving would be $1.50 pw. What a joke! The Coalition's credibility is shot because the idea of partly removing excise or GST was put to them and they ridiculed the notion and told us it couldn't be done.
I don't recall Rudd saying he could lower anything. I believe he called the government on these issues because they refused to acknowledge people were struggling.If you remember team Howard's answer to the question of suffering voters due to living costs, they said it was the machinations of the Rudd Labor government. That we had never had it so good. Because of this repetitive reply from team Howard, people seen an arrogant out of touch government. This is whatI believe Rudd set out to do.

Posted by: steve at May 30, 2008 08:03 PM

Not being a driver, I couldn't give a stuff about oil prices. The fact is, oil is running out, and oil prices are going nowhere but up. The thought of people wasting petrol by DRIVING to a service station where they can get it cheaper is yet another example of the major thinking disorder which permeates governmment, opposition and consumers on this issue. The Rudd budget has too many internal contradictions to be convincing that there has actually been some hard thinking (other than straight econometrics) in putting it together Partly this is to do with lack of co-ordination between Ministries - eg who does what. It's too compartmentalised. AND that gormless beanpole with an egg on top, Peter Garrett, is an absolutely HOPELESS minister for the Environment and the Arts. How on earth, when the Government has a HUGE budget surplus could he let them get away with CUTTING the budgets of the National Library, the National Gallery, and the National Museum??? (not to mention the solar panel means test etc). He is a man of no substance whatsoever, and should be replaced as soon as possible by someone who will put up a fight to preserve, protect and nurture Australia's treasures.

Posted by: Gayle at May 30, 2008 05:52 PM

What a lot of people are missing is the fact that governments may not control the price of oil...but they do control the tax rates on that fuel. Brenden Nelson never said or gave the impression that his proposal would lower the price of oil, but it will lower the tax that consumers will pay for fuel. Those continuing to harp on about alternative fuels and or transport - great and I agree - but the reality is, Australia has no alternatives TODAY. Not everyone lives within walking or cycling distance to public transport, and the public transport system does not fit all work commitments. At the very least the excise on DIESEL should be cut - this, in my opinion would put 'downward pressure' on prices across the board. Nick Minchin, was looking for more ideas the other day [although the alp said time and again 'WE HAVE A PLAN']...heres 1 - lower DIESEL excise...

Posted by: MalMelt at May 30, 2008 12:06 PM

The arguments on fuel prices are a furphy. There are more important issues to do with encouraging people to use their car less, not more. For us in the country we are the worst off, but understand that it is beyond the control of the leader of any colour.

The budget could have included a more "Labor" feel by addressing the poor, disadvantage and pensioners (including the disabled). By side stepping this we are willing to wait and give Rudd a second chance at the next budget. From then on, if he does not deliver for the poor and needy he will be seen as a 'Liberal' in labor's clothing.

Posted by: Alison at May 30, 2008 10:50 AM

Rudd's first budget was a classic. Get everybody wincing in anticipation of the pain, and then tap them with a feather. Everyone lets out a sigh of relief, and feels wonderful that it didn't really hurt a bit.

The budget did a few good things as well. We actually have money set aside for infrastructure:physical, intellectual and cultural, which we have needed to do for a long time. When the Government has funds it hasn't spent in one year, that should go towards projects which require substantial year on year funds, rather than be frittered away on tax cuts.

Nelson's funny little trick with excise, and his cry from the heart for the poor wheelchair bound mum in a Tarago, with six kids and a dog, waiting for hours to get fuel (Ok that wasn't in his speech but I 'm sure he was trying to put it in somewhere)was an enjoyable bit of theatre, and really should have been left at that.

At best the excise trick was a stunt, at worse it is going to make any government unwilling and perhaps unable to do the hard things that need to be done as we confront both Peak Oil and Climate Change. The public needs to know that Oil will be expensive, and that they will need to change their use of this resource. I would have thought that Nelson, and Turnbull, Those high priests of the Market, would have known that a price signal is the best way to change behaviour, but no, they choose to intervene in the market to damp down the price signal. How do Turnbull and temporary leader Nelson think they are going to convince most Australians that they are going to have to look at alternatives if every time they get a signal to change, Turnbull and Nelson turn it off? Or do Turnbull and Nelson think that there is no problem at all- like inflation and interest rates?

Rudd should have known before the election that he would have very little power to affect petrol and grocery prices, and he has to take the pain of that now.

Even though I loathed Howard and Costello, I was half hoping they would win, so they could reap the whirlwind they had created, but sadly Rudd and his team have that unenviable job. What has to be done though is not let Turnbull and his friends who sat around the Cabinet table and caused the problems we have today to forget their culpability.

Posted by: David Grace at May 30, 2008 10:42 AM

My response to the original poll on the Budget was more positive than it would be now I've had time to think about it. It really angers me that both parties are banging on about 2c a litre when there are far more important issues. Rudd is showing as much big picture thinking as Howard. Means testing solar heating is quite stupid, and says just how seriously Rudd takes climate change, likewise support for fossil fuels. And now he's even saying he'll abolish the higher tax on luxury cars. No, Rudd's first budget was cowardly and contradictory.

Posted by: John Biggs at May 30, 2008 10:30 AM

My problem with this incessant talk of who can best control grocery or petrol prices is that it misses the key point. Most of the effect is imported via higher oil prices. If you've been watching world coal prices, you may also be wondering when those will also hit us as a nasty shock in terms of electricity pricing (my guess is that the power stations do long-range forward buying, but at some point, doubling of coal prices over 12 months has to be factored into the consumer electricity price).

Both major parties are guilty of thinking too short term. Until we realize that the whole paradigm has changed -- just as much as it did when the car supplanted the horse and buggy -- and start planning accordingly, we are going to at best be fighting fires with incendiary materials.

See my blog for further thoughts on this.

Posted by: Philip Machanick at May 30, 2008 10:19 AM

Alan. Rudd gave the impression that he could fix petrol and grocery prices. The Media didn't take him up on this enough before the election. Those who were smart enough knew Rudd couldn't do anything but the media let him get away with the impression that he had some secret silver bullet. I agree that Howard wouldn't have had a silver bullet either, but he didn't get people's false hopes up.

Posted by: Joe at May 30, 2008 10:11 AM

Does anyone out there really think that, if John Howard had won the last election, the price of fuel would not have increased? Even if the coalition had removed the excise on fuel, it would still cost the same now as it did before the election, and people would still be bitching. What taxes/charges would have increased to make up the budget short fall? We could very well have been worse off than we are now, and still with NO CONTROL over the cost of oil.
It is time to think seriously of alternatives, and reduce the nations dependance on oil for fuel.
LNG maybe, instead of flogging it off so cheaply to China, India, and the US of A.

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