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Labor in deficit on surplus

By Graham Young - posted Thursday, 8 December 2011


On balance Wayne Swan's sliver of surplus spent far more political capital than it saved. Australians have a nuanced view of government spending, understand that times are difficult, and aren't too concerned whether the government achieves a surplus or not.

They do want to see leadership, and they are concerned that a surplus that is achieved by deferral and "chicanery" confirms that the government is weak and more concerned with how it looks than how it performs.

Out of 659 participants in a virtual online focus group held last week only 35% think it is important to achieve a budget surplus next year (and the majority of these are Liberal voters). The other 65% are either neutral or disagree. So a surplus is not that important to voters, no matter how important it is to the Opposition.

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Further, a massive 58% of our respondents don't believe that a surplus will be achieved versus only 26% who think it will. This isn't just a strike against the surplus, this is a strike against the credibility of the Treasurer.

Even if a surplus is achieved, it sill doesn't help the government as only 8% said they would be more likely to vote Labor if they actually achieved a surplus while 20% said they were less likely.

The apparent contradiction in this position can be explained in a number of ways.

The political climate has become so polarised that many voters will punish the government even if it does something that they agree with. For example, 24% of those Liberal voters who think that a surplus is a good thing would be less likely to vote Labor if the government achieved this, while only 10% would be inclined to reward them.

Then you have those voters who think that a surplus is unnecessary at a time of global turmoil, so see the attempt to achieve one as political incompetence. Many Greens voters are in this group.

Leximancer analysis of the data shows that voters have a fairly nuanced understanding and are tolerant of the situation the government finds itself in with this response being typical of general sentiment:

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"I'm a believer in the orthodox Keynesian view of the macroeconomy that the one of the roles of government is to smooth out the economic cycle: the independent monetary policy setting of the Reserve Bank helps to achieve this, but fiscal policy also has a role to play. If economic circumstances suggest the need for expansionary fiscal policy, the Government should allow the budget to run a deficit."

The issues shaping perceptions of whether a surplus is likely or not include respondents' concerns about the current "situation" in "Europe" and the "world"; a belief that a surplus isn't in Labor's "DNA" and a concern that the figures that are being used are concocted or wrong.

So it is a combination of economic circumstance and government predisposition. They see Australia as a victim of international influences over which she has no control and Labor's reflex to be on the side of looser rather than tighter fiscal policy.

Given the promises Labor has made about returning to surplus, it would be a brave Treasurer who broke them, but it's a breach that voters would seem to understand.

While in general voters expect governments to keep promises, that doesn't hold when they think that keeping a promise would be stupid.

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Further analysis of this polling can be found on What the people want.



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About the Author

Graham Young is chief editor and the publisher of On Line Opinion. He is executive director of the Australian Institute for Progress, an Australian think tank based in Brisbane, and the publisher of On Line Opinion.

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