Budgets need long-term vision

THIS time of year can be a bit overwhelming for those not inclined to number crunch.

Two budgets in a week is certainly close to delivering an analysis overdose.

With Peter Costello’s effort out of the way first, it is best to spend time reflecting on it.

I think this budget is particularly notable, not for its steady stewardship approach but for the Intergenerational Report, which attempted to forecast the forth-coming needs as our population ages.

This is what governments should be doing.

While politicians have to operate on a three or four-year basis, the country must be steered on a course that lasts for decades.

Traditionally, budgets have been there to manage the day-to-day economy for the year ahead and squirrel something away for a little pre-election spending.

Of course, there have been a few tax incentives or grants to push along bits of the economy but a fully spelt out business case, outlining the future scenarios on a case by case basis, is rare.

Budgets have been responsive rather than proactive.

But that is not good government.

The current Federal government has made a big effort to rein in debt and reduce deficits. This has helped Australia withstand many global shocks, cushioning us from blows like September 11.

But every business knows that good accounting is not enough. True growth comes from smart investment, calculated risks and a great deal of vision.

Government has to be the same.

That is why warning the population about ageing and starting to do something about the associated costs is a good thing.

People need to realise there is not a bottomless pit of money from which to fund a rising population of retired people with increasingly expensive medicines.

But why stop there?

The education lobby has noted the absence of their field in the budget. Yet education is one of the keys to our survival.

We need a progressive education system to turn the wealth we have gleaned from the sheep’s back, and more recently from the resources we exploit, into smarter Australians.

While we can mine or drill more to make up for this shrinkage, in the longer term the value is in brains.

I would like to see the business case for all expenditure, not just why we need to increase the price of medicine.

If a government was brave enough to set out their real vision we might have something to work towards. All those taxes might just have a long-term purpose, mightn’t they.

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