No Big Budget Surprises
To keep a lid on budget news, Australian journalists are locked up for five hours to glean facts before the treasurer's speech
THE Australian government has one way of dealing with reporters who might leak details of the annual budget.
It locks them up.
On Aug. 18, approximately 400 "journos" were confined to several rooms in Parliament House from 2.30 p.m. to 7.30 p.m. with copies of a budget the size of a phone book.
The reasons for the tradition, simply called "lock-up," include:
* Etiquette: It is felt that members of Parliament should be able to hear how money will be spent from Treasurer John Dawkins's own lips before the news media brays it to the world.
* Accuracy: The five-hour lock-up gives reporters nothing else to do but learn the budget inside and out.
* Stock market: Protecting it from sudden jolts stemming from partial information or misinformation.
The reporters plugged in their laptops, plunked down thermos, and started digesting such gripping headings as "Trends in budget aggregates."
Here's what they gleaned:
The deficit for '93-'94 will be $16 billion (Australian; US$11 billion), up from $14.6 billion last year. The budget will provide a stimulus of about 0.5 percent of gross domestic product. But the Commonwealth is not looking at what's happening this year so much as what's down the road. The budget aims to provide a modest stimulus to the economy until the world economy picks up, then slack back. The government's medium-term goal is to reduce the prospective deficit for '96-'97 by $9 billion, to 1 percent
Revenue is expected to be 23.5 percent of GDP in '93-'94, slightly lower than in '92-'93; outlays to be 27.3 percent of GDP.
This is not what you'd call a tough budget - since the government wants to stimulate the economy, expenditures weren't cut much. There were no major tax increases. Revenue primarily will be generated through indirect taxes. But it is a budget that will generate both groans and cheers.
Those groaning include smokers (higher excise tax on tobacco), those who travel heavily or entertain lavishly for business (limits in deductions), and anyone engaged in Medicare fraud. And no one in business will be very happy to learn that the wholesale sales tax will be increased 1 percent. However, modest help is provided to encourage small and medium-size firms to export.
Those watching the market will be edgy about the predicted rise in the inflation rate to 3.5 percent.
Perhaps those who will grumble the loudest are those who drive older cars. Over the next two years they'll be paying 10 cents a liter more for leaded gas. But the excise tax even for unleaded fuel will go up 5 cents a liter over two years.
The general idea was to beef up indirect tax revenues, which have been eroding since the mid-1980s, so the tax system wouldn't be overly reliant on direct taxes, i.e. personal income tax.
Those cheering (however faintly) include working parents who will receive the cash child-care rebate that Prime Minister Paul Keating promised during the election campaign. (It will be postponed until nearly the end of the fiscal year, however).
Middle-income earners will get a personal income tax cut. Farmers in financial difficulty will get some assistance. The long-term unemployed will receive a $12-a-month increase in allowance, and lower-income earners a $100 tax rebate.
At 5 p.m. reporters got a chance to grill Treasurer Dawkins. The most pointed questioning was reserved for the gas tax which will hit the poor the hardest. Dawkins claimed it was an environmental move: It's poor children who are most effected by lead pollution.
At 7.30 p.m. as Dawkins began his formal presentation of the budget, the exodus of the journos began. Many got into suddenly devalued lead fuel cars and drove off into the chilly Canberra night to file their stories.