Inside the budget lock-up


The annual Budget lock-up is a strange beast. Just about every senior political and financial journalist in the country converges on Canberra and from about 2 p.m. in the afternoon they’re locked up together in a series of rooms in the heart of Parliament House to review the national accounts. They’re not let out again until the Treasurer rises to his feet in the House of Representatives to deliver the Budget to the nation at 7.30 p.m.

There are visitors, the Treasurer Peter Costello, Finance Minister Nick Minchin, and Assistant Treasurer Mal Brough. There are many advisers and a number of harried and tired looking Treasury officials who come along to answer questions. Nonetheless five and half hours is a long time for some of the biggest egos in the country to be lumped together; and of course as far as the mug journos go, the guts of the Budget has already been leaked and is out in the public domain – but we still turn up anyway. Most odd.

Thanks to Bill Leak at the Australian

Thanks to Bill Leak at the Australian

These days you sign your life away at the door, and give over one of your most hated but essential possessions – your mobile phone. You then walk through the doors of the Main Committee room to be greeted by a friendly Treasury official who hands you a package of documents that’s about fifteen centimetres high, at least. You’re then directed to another corridor through a long succession of tables, chocker block full of press releases and media kits, and then finally you have to work your way through the maze of committee rooms to find your allocated spot.

For those who arrived a little late, yours truly included, the first question was: ‘What’s the surplus?’ Not the 12 or 13 million touted but it was most impressive just the same at a whopping 8.9 million. But more was to come. The opening words of the Budget Guide for Beginners (that’s the compact, slick looking document humbly called the Budget Overview) says ‘The Government will provide personal income tax cuts worth 21.7 billion.’ It’s at that point that I thought this is definitely Peter Costello’s last Budget.

Costello has hinted over the past few weeks about what he might deliver in his tenth Budget and he needed some big-ticket items to give him a suitable launching pad for a crack at the leadership. It certainly had a few juicy rewards and at first glance yesterday I didn’t think there’d be too many people unhappy with the outcomes. But, as I write this the morning afterwards, I know it’s not enough.

Peter Costello was unable to properly articulate a long-term tangible vision for the country. It’s one thing to hand out a bunch of goodies, and have a half hearted attempt at reforming the labour market through the much vaunted Welfare to Work package and a few technical colleges but I’m afraid this Budget is not going to entice the electorate to embrace the Treasurer. And at the pointy end where it really counts, in the Liberals’ party room, Costello has not shown the necessary smarts or courage to make more of his colleagues believe he is ready to be Prime Minister.

At face value, and as the newspapers have trumpeted, the tax cuts and wiping out the super surcharge will make many people very happy but there is a certain meanness about this Budget. Welfare groups feel short changed and believe the ‘stick’ measures to encourage people off welfare are too harsh. There’s been a fiddle with some of the assistance measures such as childcare places “ half the new places will only fill demand the department knows is out there right now. There was nothing about infrastructure plans (waiting for the Taskforce to report no doubt), no properly targeted skills package or readjustments to target apprenticeships at trades instead of retail and tourism as is the case now.

While the numbers of the Future Fund can be tricky to work out (and the Opposition claims the Government has skewed the numbers), the truth is the liability is and will continue to decline, despite Costello’s protestations to the contrary. The truth is the Government will reach its target of funding public servants super ten years earlier than they’ve forecast. So it begs the question: why not be a little less generous with the tax cuts and don’t hoard the surplus; why not string out the time needed to fund the liabilities and free up more cash for services? It was a position posed many times to the Treasurer as he wandered around the lock-up yesterday.

Costello walks amongst the journalists at around 4 p.m. It’s during this time of faux bonhomie between him and us that the Treasurer can get a gist of how his labours will be received by the media. Trailed by cameras and photographers, Costello cracks a few jokes, dispenses his wisdom, and answers questions “ and yes, he really does know his Budget backwards and can turn to the relevant section in the hundreds of pages of information with ease to reinforce a point. The set piece is at around 4.30 p.m. when as many as possible cram into a small room for Peter Costello’s press conference.

Now you expect a bit of a general wrap about the Budget before going to the floor for questions but yesterday Costello spent over half an hour going through a PowerPoint presentation about the Budget. The point being there was much less time for questions. The Treasurer is well practiced at this now and is able to deflect the more difficult questions well. Watched by Minchin and Brough, from the sidelines Costello’s general demeanour was confident without being cocky. There weren’t the jokes and smugness that characterised last year’s performance.

What was interesting was how often ‘I’ and ‘me’ was used throughout his Budget speech. There was none of this ‘we’ stuff typical from the early days. In Costello’s mind this was his masterpiece and he was going to claim it all. As the Treasurer wrapped up his speech, the Prime Minister gazed up at his deputy, not grinning proudly as he has done in the past. Howard’s expression appeared more thoughtful; almost as though he knew that once the Budget was delivered, it would signal the end of their very successful partnership. Indeed, Costello, turning to receive the rapturous applause from the Government members, smiled happily and as he shook the Prime Minister’s hand, towering over Howard, the look on his face was triumphant.

But it won’t be enough. Costello was in a good mood as he went from interview to interview up and down the Press Gallery but I think his good humour may be short lived. Costello has few options left open to him now. He can challenge Howard as Treasurer and surely be defeated, but I’m betting he won’t do it. The scenario I think more possible is that after a decent interval Costello will go to the backbench, without challenging, thus dividing the party. Here he will wait and manoeuvre behind the scenes.

There are dangers to this plan as I believe Brendan Nelson will be given the nod to step up and would probably make a good fist of it. However, like Keating and Hawke before him, Costello’s presence on the backbench would be like a cancer rotting the Government from the inside. He has support from within to take some kind of pre-emptive action including, most importantly for Costello, from his wife but I remain to be convinced that the Treasurer has the heart to do what he must if he wants to be Prime Minister.

And all the while the spectre of John Howard, the most wily, resilient and lucky politician in the country, is in front of Costello. For his part, the Prime Minister is sitting back waiting for his Treasurer to make his move.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.