Australian Treasurer's sixth budget a Swan song for Labor

Australian Treasurer Wayne Swan's Federal Budget on Tuesday could be a coup de grace to the struggling Australian Labor Party (ALP).

This, his sixth budget, actually goes much further than a nation's financial statement, for it will be a key factor in the outcome of the country's federal election this September.

In a strange political quirk, the party putting the ALP under the most severe fiscal pressure is not the opposition Liberal Party, led by Mr Tony Abbott.

Rather, that blowtorch of fiscal accountability has been administered by the ALP itself, with Prime Minister Julia Gillard and Mr Swan consistently emphasising the need to deliver a budget surplus.

It was a message that Labor pushed strongly. And it now seems strange, in retrospect, that the ALP should seek shelter in excuses about lower than projected revenues.

The same factor held no fear for Mr Swan two years ago, when he said Australian finances were "among the strongest in the developed world", and that his government was "determined" to unveil a surplus "in 2012-13, despite softer than expected revenues and increased global instability".

Instead, Labor's pledge of a A$3.5 billion (S$4.3 billion) surplus turned into a financial black hole.

The surplus eluded the ALP last year and the red ink in today's Budget is likely to have a debilitating effect on the party's already dismal standings in the opinion polls.

While there is nothing intrinsically damaging about manageable debt or a national deficit, this budget must be viewed in the context of how the size of the deficit was revealed. Labor chose a slow leaching of the truth about the extent of the fiscal blow, and that tactic is likely to remain burned into the collective memory of the electorate.

On April 21, Mr Swan flagged a deficit of A$7.5 billion. But this figure was soon to grow, both exponentially and alarmingly, as Labor's top brass took it in turns to ratchet the numbers higher.

Only a week after Mr Swan's statement, Prime Minister Gillard said A$12 billion would be more realistic. While addressing a think tank, she revealed that the expected financial windfall from her government's contentious mining tax and carbon tax had not eventuated.

In fact, said the Prime Minister, there were "far more significant reductions in tax money than was expected," causing "urgent and grave" concerns.

But if the electorate thought the softening-up process had ended, they were mistaken.

A few days later, in the first week of this month, Finance Minister Penny Wong finally revealed that the figure was expected to be A$17 billion. In one TV interview, she directly flagged the high Australian dollar as one of the contributory factors to the blowout.

But the real error here lies in Labor's strategy. Three different ministers - Mr Swan, Ms Gillard and Ms Wong - revealed three different, progressively higher figures.

The drip feed of bad hip-pocket news to a savvy electorate that is growing impatient of Labor's failures is likely to translate into a backlash at polling booths in September.

Dissatisfaction with the ALP is not limited to voters alone. Mr Tony Windsor, one of the key independent MPs whose support brought Labor to power after the 2010 federal election, is not hiding his disenchantment either.

"My guess is that he (Mr Swan) won't be Treasurer after September," he said.

"My guess is that there will probably be a change of government at the next election."

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