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.
Sales of the tablet are set to fall again, say analysts
Met Police confirm there was a 'minor disturbance' and that no-one was arrested
George Lucas criticises the major Hollywood film studios
Does Chris Grayling realise what a vague concept he is dealing with?
Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets
Parties threaten resort's image as a family destination
I Am Bread could actually be a challenging and nuanced title
- 1 Indian footballer Peter Biaksangzuala dies after injuring spine doing somersault celebration
- 2 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 3 Banksy arrest hoax: Internet duped by fake report claiming that the street artist's identity has been revealed
- 4 Drink alcohol and eat meat to improve male fertility - but cut down on coffee, studies suggest
- 5 Brian Harvey turns up at Downing Street and 'demands to speak to Prime Minister'
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Residents should throw a street party and mix with immigrant neighbours, councils told
London bus driver allegedly kicks gay couple off for kissing
Russell Brand threatened with arrest after filming outside Fox News headquarters
Amal Alamuddin calls for the return of the Elgin Marbles from Britain: 'Injustice has persisted for too long'
Lord Freud: Tory welfare minister apologises after saying disabled people are 'not worth’ the minimum wage
£80 - £140 per day: Randstad Education Leeds: Year 5 Teacher KS2 teaching job...
£35000 - £45000 Per Annum Pensions Scheme After 6 Months: Clearwater People So...
£35000 - £37000 per annum + Benefits: Ashdown Group: Systems Analyst / Busines...
£30000 - £35000 per annum + Benefits: Ampersand Consulting LLP: Senior Change ...