Reports today of a yawning gap between the Government’s expected budgetary position and the one it now faces rests in no small part with the crash in the price of iron ore and the rest of Australia’s commodity basket.
But there appears to also be a yawning gap between how the government sees itself and its actions and how these actions and plans of action on such things as the GP co-payment, higher education charges and other budgetary items have been received.
At a doorstop this morning ALP shadow treasurer Chris Bowen summed up how the government created its own headache when he said:
Joe Hockey fundamentally misjudged the Australian economy when he brought down the last Budget. In his rhetoric and his actions, he smashed consumer confidence. In his rhetoric and his actions, he actually talked down the Australian economy in a way which has effected economic activity through confidence and that will reflect as well. So Joe Hockey, as well as bringing down an unfair Budget, has brought down a Budget which is bad for the economy which will be reflected in the figures when he chooses to release them.
Consumer sentiment crashed around the time the first budget leaks were made in late April and while there has been a substantial recovery since sentiment, as measured by the Westpac-MI survey, still remains below the long-run average.
As partisan as Chris Bowen’s comment might be he hit the nail on the head.
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