Wednesday, January 23, 2008

Me-tooism: Are the chickens coming home to roost?

During the Federal election campaign I felt that Kevin Rudd conceded too much ground to the Coalition.

By adopting many Coalition spending committments, I thought he would place at risk Labor's ability to set it's own agenda once in office.

In no area was this more true than in relation to the coalitions $31 billion tax cuts.

With rising inflation a growing threat in the second half of 2007, Rudd should have adopted a much more conservative fiscal outlook than he did.

Maybe it is easy to say in hindsight, but he didn't need to spend up big during the election campaign because the Howard government had simply run out of puff.

The coalition could have been knocked over with a feather, rather than bucket loads of cash as was the case.

Now labor finds itself in a tight position with less money to spend on investment in infrastructure and skills, and with savings needing to be found in existing programs.

No doubt the first budget will be an unpopular one for many voters. However, the problem for Labor is not a stingy first term budget, but rather the impact electioneering profligacy will have one the rest of its first term in office.

Rudd will be preying for two terms for the Labor agenda to shine through.


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