Swan's fudging meets Abbott's plain speak

THERE is an intriguing distinction between Labor's public and private rhetoric on reducing middle-class welfare.

Publicly, Julia Gillard and Wayne Swan reject the term for fear of it being misread as an attack on working families.

Privately, though, there is no ambiguity. This government wants to be remembered for dismantling the Howard handout machine. It understands it can do this only by targeting many households which believe they belong to the hard-pressed middle class.

Labor has taken the long road, through a series of changes to means tests and indexation arrangements from the baby bonus to the private health insurance rebate that will reduce the total number of beneficiaries over the rest of the decade.

In an ideal world, Labor would be clear about what it was really up to.

It would also stop engaging in the double standard of, say, squeezing the baby bonus while introducing a school kids bonus.

But in a choice between jargon and direct language, the forces of obfuscation win every time, as the Treasurer demonstrated in his keynote address to the Securing the Future conference on Thursday night.

Swan put middle class in quote marks to signal that it was not his term.

He called out the hypocrisy of those "who bag 'middle-class welfare', then attack the government for sensible steps towards making it more sustainable".

"It's not good enough to beat the drum on better targeting payments, then attack the dozens of saves that are doing exactly that," he said.

The term "saves" wasn't in quote marks but it should have been. Swan presents himself as goalkeeper, defending the budget against the penalties of the former Howard regime.

He can rightly point an accusing finger at the Opposition for defending the excesses of the baby bonus and the private health insurance rebate, and its friends in the media for pretending that upper-income earners on more than $150,000 are innocent victims of Labor's budget measures.

Yet Swan encourages the misrepresentation with his imprecision.

Tony Abbott, meanwhile, continues to present as a plain speaker without a plausible agenda.

There was just a touch of the Kevin Rudds in his luncheon address yesterday - reviews and big round numbers. He announced a productivity priorities working group and promised to remove $1 billion in business red tape.

The Opposition Leader wants to abolish taxes on carbon emissions and mining profits which have minimal impact on the real economy at a time when the revenue side of the budget is bleeding. It has been belted by the global financial crisis and will come under a second wave of attack as the population ages.

Abbott pretends that a restoration of Coalition government will return tax collections to their pre-GFC state. But this can't be done without extending the reach of under-performing taxes such as the GST.

The consensus among experts at the conference is that without tax reform to broaden the GST and increase the rate, the productivity reform debate cannot even get to first base.