Why Australians still see Swan as a lame duck
It must be to the eternal frustration of Treasurer Wayne Swan that, while the rest of the world thinks he is genius, Australians are considerably less sanguine when it comes to his fiscal abilities.
Labor’s own research reveals the depths to which Swan has failed to excite us about how wonderful the domestic economy is. What will really get his goat is that, according to research conducted by the Labor researchers leaked to The Daily Telegraph, people reckon Joe Hockey is a far better bloke.
Swan has been Treasurer for almost five years, and has seen Australia through the worst economic crisis in modern times - compared to Hockey’s short stint as financial services minister more than a decade ago and the current two and a half years as Swan’s shadow.
Unlike Swan, Hockey has a spot on Sunrise.
Swan’s net positive rating in June was negative 22. As counter-intuitive as this marketing measure appears, it essentially means people don’t like him. Hockey’s was plus four. Which only means that people dislike him less. You get the picture.
What is telling about this research is that Swan has become more unpopular over time. In September 2010, for example, he was only at negative six. It is yet unclear whether his Springsteen moment has endeared him.
But the revealing bits in the research went to questions about people’s expectations of the economy and their own financial outlook. Since late 2010 people’s personal financial outlook, economic expectations and optimism had all flatlined.
People’s outlook had gone from negative eight to negative 34 by the week of the budget. Hopes for a long-term improvement in their lot also hit a record low of negative 23.
That was until late May. Following the budget, when the handouts began to sink in with punters and up until July after the carbon tax came in and didn’t blow up the world, all the indicators began to tick up. Not dramatically, but enough to suggest people have become less pessimistic than they have been for a long time.
The confounding issue for Swan is that people’s regard for his job performance went backwards - with 53 per cent of people being either very or somewhat dissatisfied with him as Treasurer.
What it suggests is that, if the government could indeed manage to sell water to a man in the desert, that man wouldn’t want to buy it off Swan. Kevin Rudd was always concerned about Swan as Treasurer precisely for this reason. He would have preferred Lindsay Tanner or Chris Bowen, with an economics degree from UNSW, or even Craig Emerson, who has a PhD in the subject.
While the rest of the world has warmed to Swan, Australians haven’t. But then people’s perceptions and expectations of the economy and those in charge of it have changed since the GFC.
The other thing that has changed is the fiscal outlook, which arguably is a bigger political headache for Swan.
Treasury boss Martin Parkinson has warned people will need to lower their expectations of what governments will be able to deliver in the future because of the growing gap between the demands on and the revenues than can be generated by government. He says governments will not be able to meet their policy spending agendas by merely cutting more out of the public service.
This has direct implications for the Gillard government, which has clearly now set its second term agenda into the next election around massive long-term spending priorities, particularly the National Disabilities Insurance Scheme and the yet to be announced school funding reform package in response to the Gonski review of education.
The cost of these alone could be as high as $15 billion a year if implemented fully - although the states would wear part of the cost of both. There is also a more immediate problem of the billions which will need to be spent on adopting the recommendations of the Houston report into solving the asylum seeker issue.
Parkinson has suggested that raising taxes may become the only option left for governments.
Ken Henry’s similar warnings this week have particular implications for Sydney and NSW.
His greatest concern is that our major cities don’t have the infrastructure to cater for another 14 million Australians.
He could have gone further and admitted we clearly don’t even have the infrastructure to cope with the demands of the current population - which is nowhere more evident than in Sydney and the appalling lack of transport infrastructure and an outstanding capital works list of more than $100 billion.
“The fundamental question of course confronting all of us about that infrastructure build requirement is how’s it going to be funded?” Henry said.
Simon Benson is the National Political Editor of The Daily Telegraph.
Comments on this post will close at 8pm AEST.
Read all about it
Up to the minute Twitter chatter
The latest and greatest
Good morning Punchers. After four years of excellent fun and great conversation, this is the final post…
I have had some close calls, one that involved what looked to me like an AK47 pointed my way, followed…
In a world in which there are still people who subscribe to the vile notion that certain victims of sexual…