LET’S face it, government budgets lost meaning a long time ago – at least as a kind of one-off announcement where everyone held their breath to see how they were affected.
These days, most of the major items are leaked well and truly beforehand, making the budget day announcements largely meaningless. Governments either make their changes known ahead of time to reduce the shock, or are testing the water to gauge reaction.
Take the threatened changes to superannuation as an example. After months of drama, almost enough to cost Prime Minister Julia Gillard her job in February, the government had retreated from the idea of raiding super to maintain its high spending. So much for vision.
Clearly the federal government has learned from its blunders over the mining tax. Surprising an industry with a massive tax on budget day (as it did in that case) is nearly political suicide.
However if there are no surprises, and therefore no news, that rules out one of the big reasons people wait to hear about the budget.
Another reason budget announcements now seem pointless is because no-one believes the numbers. The forecasts are so poor they are often shot down on day one.
No-one has proved this better than Treasurer Wayne Swan and Treasury.
Dare I add that governments also seem to ignore budgets when it suits them. Some of the biggest expenditure or taxation decisions are made well out of sequence with budget considerations.
The budget process is another example where government could learn from business. Listed companies would face legal action for leaking market-sensitive facts before their annual results. And forecasts as poor as the ones we see from government would result in significant censure from the market.
At least governments are ultimately held to financial account, even if it is just once every three or four years – unlike business, which faces that every day in the case of public listed companies.
