Budget 2008 - both more and less

Kevin Rudd’s first budget has consolidated his election win, and his position as the leading figure in the government. Hardly anyone sees it as Wayne Swan’s budget. Voter reaction also confirms the broad lines of attack and defence that the government and opposition will be using.

The government will say it is a good Labor government, governing for working Australian families and the future, while the opposition will pick at concerns that Rudd lacks substance, is an opportunist and stands for nothing. At the moment these are the lines that reinforce voter intentions, and these intentions remain intact from the last election.

We had 1,681 responses to our budget poll which was open for only a 24-hour window just after the budget, and before Brendan Nelson’s address-in-reply. While our analysis is primarily qualitative we can draw some quantitative conclusions by weighting voting intention having regard to quantitative polls such as Newspoll and Morgan.

After weighting the vote we find that most respondents approved of the budget by a margin of 54 per cent to 28 per cent. This appears to be a judgment about its affect on the entire nation. Only 25 per cent thought they were personally better-off, while 22 per cent thought they were worse-off - a marginal advantage. This was outweighed by the fact that 48 per cent thought that the budget would be good for the nation, compared to 26 per cent who thought it would be bad. These figures were reflected in the balance between those who thought the country was heading in the right direction - 58 per cent - versus those who disagree - 28 per cent (an almost complete reversal of these figures under Howard from our benchmark poll last year).

Our approval figures for Kevin Rudd of 61 per cent are similar to most other polls, but our figures for Brendan Nelson significantly worse. In our poll 17 per cent approve of Brendan Nelson’s performance, and 53 per cent disapprove. Compare this to Newspoll on May 16 and 18 (PDF 20KB) when 37 per cent were “satisfied” with Brendan Nelson and 39 per cent “dissatisfied”. However, this has little effect on voting intention: 34 per cent are more likely to vote for Kevin Rudd as a result of the budget, while 29 per cent are less likely.

Tax was a central issue for all types of voters, both on the positive and negative side. Liberal voters are more likely than most to want tax cuts, and they were happy that the cuts were honoured, as were many Labor voters. At the same time many respondents had concerns that taxes could have been better directed towards services. This was a sentiment more likely to be associated with Labor voters in which case it was also frequently tinged with relief that Rudd had kept the promises he made, in contrast to their perceptions of John Howard as a serial pledge-breaker.

Voters on all sides are also concerned about the future, and this was a central, and widely expressed concept. It probably figured more than it might have because of the Rudd Government’s decision to build on Howard’s future fund by setting up some of their own. Liberal voters approved of this, because they had ownership of the issue, as did Labor voters, because they saw concern about the future as a core reason for voting for Rudd.

“Working families” is a concept that has probably passed its shelf-life. While it is meant to appeal to a particular demographic that also means that it excludes other demographics, which voters in those groups read to mean that they are economy class voters. This is probably an underlying reason why pensioners were protesting in the streets, and can be contrasted with John Howard’s promise to govern “for all of us”.

However, there is an implicit promise from Labor that some parts of the community are going to be worse-off, and this was honoured through the means-testing of some benefits. This was very popular, particularly with Labor voters. They saw it as being a way to save money for other, more deserving projects, or as an issue of equity. But I also detected in some responses pleasure that the better-off were being taken down a peg, something the Coalition might characterise as “class envy”.

Another negative is “climate change”, and this was a concern almost completely confined to Labor voters. Rudd won a lot of Greens’ votes at the last election, and he may be banking on the fact that his social agenda is more appealing to them than the Liberals’ so he can afford to trade their environmental concerns for the economic concerns of “working families”.

This could be a reasonable belief, but these voters are also intelligent and volatile, so they may call Labor to account in unexpected ways. For example, his election to federal office may make them comfortable enough to protest against state Labor governments by just voting 1 Greens and refusing to allocate preferences in the states where this is possible.

One issue that was not particularly negative for the government but commanded a lot of media coverage was increasing the tax on “alcopops”. Out of all the responses we received there were only 15 mentions of the word, and some of these were from the same respondents. The time that the Opposition spent on this was counter-productive.

Overall the budget didn’t evoke strong emotions and was incremental rather than revolutionary, which probably explains the different points of view represented by these two comments from opposing sides:

"Even though I am a Labor voter, I had Kevin Rudd pictured as a somewhat uninspiring bureaucrat with a savvy media image. The budget dramatically improved my assessment of him as a genuine Labor Leader" - Labor voter.

"Kevin Rudd is all talk and no action. Before the election he gave the impression that he could drive down inflation and the cost of living. It is now obvious that he can't." - Coalition voter.

The Labor voter is relieved that the Labor package is a bit more exciting than was promised in the election campaign, while the Coalition voter is upset that it is actually less-inspiring. That has to mean that Labor should be happy with the budget from on the basis of public perceptions.