Whoever fights it
Finance Minister Lindsay Tanner has signaled an austerity election campaign, saying he'll approve new spending in the May Budget only where it is offset by new savings.
"It's hardly a great secret that governments tend to like to go to elections off the back of generous Budgets and, of course, over the past decade there have been numerous examples of which I'm sure you're all aware," he told the National Press Club.
"But the commitment we have made is to offset any new spending with savings, and to ensure that once normal levels of economic growth have resumed, and at this stage that looks like that's about a year or so away, that we will ensure that Government spending does not increase by any more than 2 per cent in real terms until the budget returns to surplus."
"That means the loosen-the-purse-strings, giveaways, type of Budget that in popular mythology tends to be associated with election years is just simply not feasible... We do not have the luxury in May of saying, well, we'll be tough on spending maybe next year and we're going to have a big splash now. That simply is not feasible."
Asked how Labor could compete with the Opposition under such circumstances he said it would be challenging, but "even more challenging for the Opposition".
"We don't know whether Malcolm Turnbull is going to continue to be leader of the Opposition, but he certainly has made very strong statements that the Liberal Opposition would have smaller Budget deficits and a lower of level of debt than is currently projected by the Government. What that means is that however tough we are, they're promising to be tougher."
The Finance Minister said he believed the Australian public would welcome an election campaign free from big-spending promises.
"You've got obviously a wide variety of views. But I would say this. In the 2007 election campaign, when Kevin Rudd stood up at his campaign launch and said the spending spree has got to stop and the commitments he made that night would be less than 25 per cent of the commitments that Mr Howard had made at his launch a couple of days ago. I felt then, and I still feel it, that was the time when we won that election, because that amounted to a statement to the Australian people that we had the wherewithal to withstand pressures."
"People will debate these things. I'm sure that some of my caucus colleagues when they're confronted with the prospect of whether or not a particular project or program should be financed in their electorate, will give slightly different views. But I believe the bulk of the Australian community understand that this is not free money and that electoral bribes, if not past their use-by date are at least nowhere near as potent as some in the past have argued they are."
Ahead of the May Budget the governmment would release the third Intergenerational Report detailing "significant pressures to the Budget, with rising health, pension and aged care costs the main drivers".
Published in today's SMH
. $11 billion fewer reasons for the Coalition to complain
. The Coalition Debt Truck: Running on empty
. You died "vomiting money to anyone registered to vote"