A Tale of Two Budgets

I wrote about this a while back, and it seems Jim Middleton agrees with me.

The debate over economic ideology is over, and "We're all conservatives now".

So now we get two fiscally conservative budget proposals. Is that really something to celebrate?
I'll give my take on the two in a moment, but first, I should mention something which I found a touch disturbing.

In neither Costello's or Rudd's speech was the word 'aboriginal' mentioned once. This is in spite of the fact that Costello's budget actually puts $3.5 billion into indigenous related policies.

There's only a limited time for them to outline their proposals, and no doubt the speech is scrutinised by various media advisors. The worrying trend would be then that they have concluded the average Australian either doesn't care or doesn't want to see funding into indigenous policies.

And now to the budgets and their speeches.

Costello put his budget across in a very considered tone, and very reasonably. When he was pronouncing the actual sums of money involved, he would adopt the tone of voice one would hear from a tightpursed grandmother giving her child some birthday money.

The strongest point was the University Endowment Fund, though it's not quite clear when we'll actually see any fruits of such a fund. And so Rudd's attack that this is a short term election budget plan is probably somewhat misguided.

The tutoring voucher of $700 seems a fine idea, but also doesn't seem to be thought out.
Julie Bishop floundered when asked by Kerry O'Brien who would be elligible to give the tutoring.
Furthermore, I'd like to know what the average costs of tuition are. If we say $35 an hour then that's 20 hours. I don't think 20 hours will necessarily turn a lagging student into a high achieving student, so one could say that this is a bit of an election bribe.

Providing extra teaching training is also a fine idea, but my housemate (who is a teacher) pointed out that it's most likely older teachers who will be in need of a refreshment course. So targeting young teachers, as this proposal seems to do, could be money poorly spent.

$500 for senior citizens? That's a nice gesture too, and I'm glad to think that my grandmother might be able to get herself something nice courtesy of Costello, but it's also nothing more than a bribe.

Tax cuts to lower and middle income earners are much appreciated, and as George Megalogenis (video available here) points out, this proposal is closely related to Work Choices.

It was, as many have pointed out, the first time we've heard "Global Warming" mentioned by Costello, and extra incentives to invest in solar is an excellent move (which was mirrored by Rudd). Strangely, on the energy issue, neither Costello nor Rudd mentioned geo-thermal, in spite of the fact that I'm led to believe it's one of Australia's best options.

Overall, I'm sure it will swing some votes back in the way of the Coalition, and Costello is certainly putting feet in the right places where Howard is not. I'm sure the Coalition wishes they'd let Costello take over last year.

Rudd's speech itself was an absolute shocker. It sounded as though he'd not even read the speech before, and the speech itself was a hulking trainwreck which repeated tired old catchphrases such as "throwing the fair go out the back door".

Broadband is an issue close to my heart, so I was glad that it got a place. However, there was a discrepancy in the speech which I'm not sure everyone noticed.

He stated earlier that "Italy will soon be laying out a broadband network for two thirds of its population of up to 100 megabits per second". That is a brilliant plan indeed, and world-class.

Later on, however, it is revealed that "Labour's plan is for a state-of-the-art fibre optic to the node national network with a speed of 12 megabits per second (capable of upscaling) to be laid out over a 5 year period".

12 megabits? As in, half of the maximum speed currently available in metropolital areas?
Yes, that's right, we already have a network capable of 24mbps. And 24mpbs still isn't that great by world standards, as Rudd himself shows with the Italian example. So Rudd's plan will really affect those in regional areas who are currently stuck on 1.5mpbs or worse, and there's nothing wrong with that. In fact I'm glad that young kids in Kurranda will be able to play Counter-Strike competitively. But if Rudd wants to run broadband as an economic issue, he'd do well to actually have a plan that would affect businesses.

I should point out, however, that Peter Beattie does actually have a plan for Brisbane which proposes a 100mbps network. This is sweet indeed, and would unquestionably encourage businesses who communicate large data packets to relocate to Brisbane (engineering firms are a prime example, at the moment they often have to burn their data onto a cd and then physically mail the cd out, wasting time and money).

So whilst a broadband plan is needed, and urgently, I was unimpressed with Rudd's offering. There is hope, however, that the upscaling potential will be fulfilled. And for the time being, it's still far better than Costello's lack of a broadband proposal.

Rudd invested slightly more than Costello in education, which is to be expected, although his focus was not universities, sadly. Rudd has chosen to focus on the skills sector, by offering up to 1.5 million dollars to high schools across Australia ("all 2650 of them"). Of course, he's counting on the fact that most high school's won't take up this offer, otherwise he'd need to put down $3.975 billion on the table (has has in fact put down only $2.5 billion).

He has also pledged to phase out full-fee paying students. This is in contrast to Bishop's idea of increasing the number of full-fee paying students.

I'm no fan of full-fee paying students, especially if it means that there are less commonwealth-supported places as a result. Rudd doesn't mean to extend this to full-fee paying international students though, because that would make universities less than thrilled given the enormous revenue brought in by such students.
I also hope it doesn't result in HECS fee's increasing to cover universities loss of profits.
We'll have to wait for more on that policy.

Finally, Rudd pledged $70 million for Asian Languages. I was at first delighted at this news, but apparently so far it only targets high schools. Which is a shame, really, because I'm of the opinion that learning languages in high school doesn't really deliver effective results. This is purely based on personal experience, whereby the same issues that would make say, Shakespeare uncool, also result in the study of language being uncool and purely academic. My main exhibit here would be the extremely poor level which high-school students of Chinese arrive with at 1st year university.

So comparing the two, I like Rudd's ideas the most, and appreciate where he is coming from. Upon closer examination I'd say Costello's probably more realistic and will actually deliver what it sets out to do. But it would be unfair to Rudd to judge his budget now as it was only a 'right of reply' which we saw last night. So I'll wait and see, and remain hopeful that some of the issues I have outlined above are ironed out.