Keating budgets for sixth Labor term of office
Wednesday 10 May 1995
Mr Keating faces an election within a year, at which he will be seeking to win an unprecedented sixth term for Labor. Yesterday's budget, announced in parliament by Ralph Willis, the Treasurer (finance minister), had Mr Keating's stamp firmly on it in an effort to convince Australians that inflation, interest rates and unemployment will remain under control as the economy moves further into recovery.
While Mr Keating slashed public spending, his ambition to turn Australia into a republic by 2000 was spared. The budget provided A$25m (£11m) to set up courses on "civics and citizenship education" in schools and universities, after a report last year found widespread ignorance about the workings of Australia's written constitution.
The government knows that the eradication of such ignorance will be vital to winning public approval for changing to a republic.
The most controversial move yesterday was Mr Keating's decision to ditch tax cuts worth $5.2bn (£2.4bn) which he had promised three years ago to phase in for lower and middle-income earners. He campaigned on the cuts at the last election in 1993, even when they looked to be increasingly unaffordable, by boasting that they were "already L-A-W, law".
The budget "redirected" the tax cuts as pensions. It did so by earmarking a proportion of their incomes which employees must contribute towards their own pensions and promising that the government will match such contributions.
The strategy was designed to tackle Australia's chronic current-account deficit, which increased further in March to 6 per cent of gross domestic product, a situation brought about by the country's propensity to spend more than it earns and to import more than it produces.
After several years of running budget deficits as it sought to stimulate the economy out of recession, the government yesterday put on the brakes by announcing tight fiscal measures which will bring the budget into surplus next year, three years earlier than previously forecast. It projected strong growth, low inflation and falling unemployment next year.
Mr Keating will embark on a tour of Australia's big cities to sell the budget and to test the climate for an early election. "There's no such thing as a grand final in politics," he was reported as telling Labor MPs on Monday. "You always have semi-finals. Even after an election they have you dead the next week. The main thing is to keep winning."
If business and the markets respond favourably, and if mortgage interest rates come down in the budget's wake, he will be tempted to go to the polls between August and November rather than complete a full term.
Two opinion polls on Monday indicated that the government was closing the lead held by the opposition conservative coalition and that the honeymoon enjoyed by John Howard, the opposition leader, since his installation three months ago, was ending. In one poll, Mr Keating was preferred as prime minister over Mr Howard by 41 percentage points to 39.
- 1 Venezuela Expo Tattoo 2015: Extreme body art from 'Vampire Woman' to 109mm earlobes
- 3 Ball pool for adults opens in London
- 4 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Putin opponent reveals Russian President's daughter's secret identity
Ball pool for adults opens in London
Gay couple buy JebBushForPresident.com web domain, and refuse to sell
16 Waitrose customers who could not cope with the end of free coffee
9 reasons Greece's experiment with the radical left is doomed to failure
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
King Abdullah dead: We can't afford not to hold Saudi Arabia's royals to account
Negotiable: Tradewind Recruitment: Phase Co-ordinator for Foundation and Key S...
Negotiable: Tradewind Recruitment: SEN Teacher We have a fantastic special n...
Negotiable: Tradewind Recruitment: My client is an 11-18 all ability co-educat...
£100 - £150 per day: Tradewind Recruitment: Year 6 Teacher Birmingham Jan 2015...