The MSM are finally realising (or, at least, reporting) that Wayne Swan has budget problems. He has never been up to the job. Before the 2007 election there was some speculation that he wouldn’t get the Treasurer job.
KEVIN Rudd has been forced into guaranteeing Wayne Swan will keep his treasury job a day after a blunder in which he said all frontbench positions, including his own, were up for grabs.
The Labor leader yesterday said the three “core members” of his economic team would keep their current responsibilities if he won Government.
Everyone else would be judged on their individual performances, Mr Rudd said.
There has been speculation that Workplace Relations spokeswoman Julia Gillard was eyeing Mr Swan’s treasury role and Mr Rudd fanned this talk by refusing to rule out plans on Wednesday to move Mr Swan elsewhere.
As it turns out Rudd’s job was up for grabs.
In addition to the budget still being in deficit and the government having no narrative about what its budget strategy is and the mining tax being a complete disaster, we read yesterday that the carbon tax has a $4 billion hole in it. Here is what the AFR say today:
Take the mining tax. The fact the tax raised only $126 million in the last half of 2012 could not possibly reflect weakness in export prices.
If the mining tax can’t raise revenue in this environment, then it never will. Note that this tax was supposed to raise $9 billion in revenue over the next four years, or just over $2 billion a year.
Then there’s the carbon tax. As reported in The Australian Financial Review this week, about another $4 billion could be taken out of annual budget revenues from 2015-16 if more realistic forecasts for the likely carbon emissions price are used. Treasury has currently pencilled in a carbon price of about $25 a tonne from July 2015, even though prices will be aligned with that in Europe – which is now between $5 and $6.
The Liberal opposition could now more comfortably ditch both the mining and carbon taxes – not because of the damage they would do to the economy, but because they are very cumbersome and inefficient ways of achieving their objectives.
This is all their own fault – we have a government that cannot tell the difference between forecast revenue and actual revenue and framing its spending agenda accordingly. The mining tax and the carbon tax have failed for reasons that were articulated at the time of their introduction. Fortunately there is much ruin in a nation, but little ruin in Wayne Swan’s ideas.
Even if he keeps his job to September, this government will be flung out of office by an appalled electorate. The incoming Treasurer and his team will have a very difficult task ahead of them.