Australian gov't "kinder" budget could help win back voters

APD

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After last year's slash-and-burn budget which enraged many voters, Australia's Treasurer Joe Hockey 's second budget which was delivered on Tuesday night is an unashamed attempt to win back those unhappy voters and deliver the government some good news in the polls.

The term, such as "budget emergency" and "lifters not leaners" that accompanied Hockey's dramatic first budget have vanished, and been replaced by a much more positive message which Hockey and Prime Minister Tony Abbott have been selling on high rotation.

"I think Australians naturally want to have a go. I think we understand in the marrow of our bones that the only way we can deliver a fair go for everyone is if the creative people in our country are prepared to have a go and that is what this budget is designed to do: encourage people to have a go," Abbott said during a interview.

The move to positive language, as well as popular spending, is more of a political ploy than an economic one.

It is being seen as a last attempt to save Abbott and Hockey's jobs. After surviving a leadership spill motion in February, which brought to a head a tumultuous first 16 months in office, Abbott begged his colleagues for six more months.

Abbott said if he was given the chance at delivering one more, politically palatable budget, he could win his colleagues and the voting public back on side.

Early indications are that it is working. The Opposition Labor Party has had its lead in the polls cut in half. Voter satisfaction with Abbott, although still in negative territory, is now close to even with Opposition Leader Bill Shorten.

When asked if this was an election budget, Abbott replied: "It' s a budget for the Australian people."

Government spending, which was rising rapidly in the final years of the Rudd-Gillard reign, has tapered off, but still remains at heights only surpassed once in the past 20 years and that was in the year after the global financial crisis.

Hockey estimates government spending will be at 26.2 percent of GDP in 2015-16, before taking a 0.4 percent step down next year, taking the budget deficit down to 12 billion U.S. dollars by 2017- 18.

But the budget forecasts are based on two assumptions: that economic growth at home will rise from 2.75 percent and China's demand for Australian products, primarily iron ore, will not slow any further.

"With more than 1.3 billion consumers living in China, the demand for our exports will continue to grow," Hockey told Parliament on Tuesday night.

"For every dollar we spend buying Chinese goods and services, the Chinese spend two dollars buying our goods and services.

"We are the big winners out of this relationship."

Abbott was keen to emphasize the austerity measures enacted in last year's budget -- many of which failed to pass the hostile Senate without being toned down or killed off -- were no longer necessary.

"We are doing the responsible thing under the circumstances that we find ourselves in," he said.

"We've got a credible path back to surplus. We inherited a deficit of 48 billion Australian dollars (38.4 billion U.S. dollars) and every year the deficit comes down by about a half a percent of GDP and I think under the circumstances that's a very good result," said Abbott.

His fondness for slogans has not ceased and Abbott jokingly said it was a budget for "Tony's tradies (tradespeople)" which had echoes of the phrase "Howard's battlers" which described voters won over by former prime minister John Howard.

Tradespeople and other small business owners will be able to instantly claim tax back on new assets costing 20,000 Australian dollars (16,000 U.S. dollars), significantly lifting the threshold up from 6,000 Australian dollars (4800 U.S. dollars) two years ago.

It is a move that is proving popular across the board, including with the Opposition.

Labor leader Bill Shorten will deliver his budget reply speech on Thursday and has already indicated he will support some of the most popular measures set out by Abbott and Hockey.

The generous childcare package, worth 2.8 billion U.S. dollars, that will significantly subsidize the cost of childcare for working and disadvantaged parents is expected to receive bipartisan support -- although Labor has indicated it is unhappy with government plans to fund that package, and will seek to amend them.

The government's relationship with the eight crossbench senators will be critical this year. Where Labor does not support the government's measures, the bills then hinge on the votes of six crossbenchers.

The government, wary of the trouble it experienced throughout last year, will adopt a kinder, more cautious approach and one its rising stars, Scott Morrison, the social services minister, will be a key to those negotiations.

Morrison's negotiations skills so far have endeared him to the crossbenchers and his unveiling of various packages ahead of the budget was well received by the electorate.

Without the ruthless cuts of last year, the new Budget may well be popular enough to establish the platform of Coalition's next election win.