Scrimping and scraping is a necessary evil for balance

Making room ... Treasurer Wayne Swan and Finance Minister Penny Wong.
Making room ... Treasurer Wayne Swan and Finance Minister Penny Wong.

We got short-term budget fiddles, but also some important long-term change. The midyear forecasts show Australia's ''shift to thrift'' is starting, and for at least some of the right reasons.

The Treasury secretary, Martin Parkinson, has warned of the expectations gap - that voters expect more from government, and an ageing population might need more from government, than current taxation and spending settings can provide.

The Treasurer, Wayne Swan, was suggesting the same with yesterday's structural savings - the reductions in the baby bonus, the private health insurance rebate change - and when he said the budget would bring more of the same.

These, he conceded, were necessary to ''make room'' in the public purse over the long term for big ticket spending priorities such as the Gonski education reforms and the national disability insurance scheme.

Australia faces nothing like the kind of debilitating austerity Europe has to endure. We are not standing with our toes dangling over a fiscal cliff like the United States, but we do have to steer a fundamental budgetary change.

We need a rational conversation about what governments can continue to pay for, how they raise that money and what services and payments voters have a right to expect.

But as well as some of that conversation yesterday, we got scrimping and scraping to return the budget to surplus in 2012-13 in order to meet a purely political promise that was made when revenue forecasts looked a whole lot healthier.

Mr Swan seemed to acknowledge that agonised accounting has now delivered all it can - declining several chances to promise his surplus would survive a sharp global economic decline, should that occur before the budget next May.

Instead he said he'd make sure the economic settings ''support jobs and growth'' and would ''match the economic circumstances''.

Tony Abbott justifiably ''called out'' the ''fiscal fiddling'' - the spending pushed back, the savings brought forward - that ensured Labor's surpluses stayed on track.

But then instead of asking how Labor's long term spending promises would be paid for, he decried that families were suffering any new cuts in government payments and support. He strongly and implausibly implied he could bring the budget to structural balance without such cuts.

And in contrast to his brave speech in April about the need to end the culture of ''universal entitlement'' in Western democracies, Joe Hockey attacked the reduction in baby bonus for second and subsequent children as ''social engineering'' and ''discrimination against big families''.

But despite this short term rhetoric, the Coalition is likely to allow most of the cuts through. Because the shift to thrift requires exactly these kind of long-term changes, no matter which party is in power. And both major parties know it.

This story Scrimping and scraping is a necessary evil for balance first appeared on The Sydney Morning Herald.