Peter Costello Set The Test for Budget In Reply

11 May 2011

Joe Hockey has been telling Australians for a week now that he could return the budget to surplus in 2011-12.
Tomorrow night, in his budget in reply, Tony Abbott must outline to the Australian people how he proposes to achieve this goal.
When drafting his budget in reply, Mr Abbott should heed the words of former Liberal Treasurer Peter Costello.
In May 2004, Mr Costello said of Mark Lathams budget in reply:
There was no specific policy, there was no costings, there was no explanation of economic policy or financial policy. There was nothing that we had not heard before. There has been no work done. They have put forward no policy, and most astounding of all, after saying that he would be announcing tax cuts for people, he made no tax announcement. Not a single tax announcement and this is supposed to be a Budget reply. Now even last year Mr Crean did a Budget reply and that is what it looks like. You do the tables as to what your policies are going to cost and how youre going to pay for them and that was Mr Crean last year. There is not a single table or a single amount and I think Australians have been taken for a ride tonight because whatever that speech was about it was not a reply to the Budget.
So the test for Mr Abbott tomorrow night is clear.
Mr Abbott must either:
  • Back the savings measures in the Governments Budget; or
  • Put forward alternative policies, outline how much they will cost and how he is going to pay for them.
If Mr Abbott fails to outline the savings he would make to return to surplus, it will confirm his fiscal recklessness and the Liberal Partys lack of economic credibility.