Deputy Wayne Swan's bid to deliver political salvation for Julia Gillard

POLITICAL salvation is what Julia Gillard seeks and Wayne Swan has done his level best to make it happen in this budget.

Wayne Swan

POLITICAL salvation is what Julia Gillard seeks and Wayne Swan has done his level best to make it happen in this year's federal budget. Relying on the treasurer to save the prime minister, what could possibly go wrong?

The mechanism is handouts, plain and simple. Mr Swan has thrown money at lower and middle income Australians through education handouts, students concessions and upwards adjustments to the Family Tax Benefit A.

The clear hope is that by putting money in voters pockets the government can make the public stop and think about whether it wants to risk switching governments. Why? because Tony Abbott plans to take such handouts away.

The government desperately wants to turn the political contest in this country into a two-horse race, not the one-way attacks it suffers from at the moment. This budget is designed to help make that happen.

Which makes it a more politically orientated budget than most. Forget all the talk about the focus being on economic settings to help put downwards pressure on interest rates. If that happens it will be a bonus. The main purpose behind the budget is to re-engage with mainstream voters. That has been done with targeted cash injections.

It really is an ironic situation. A deficit this financial year of $44 billion we are told will be replaced with a $1.5 billion surplus next financial year. A contraction of that magnitude should make this an increabily tough budget, but it isn't. Certainly not for average voters.

The handouts are linked to the mining and carbon taxes, which Mr Abbott has staked his reputation on winding back. Labor hopes that if voters start to think about the fact that what they get they may no longer get under Mr Abbott, the polls will tighten. In turn, if that happens they hope that the Liberal Party is called greater to account for the economic inconsistencies it currently gets away with.

The government's hope is very much that handouts are real, prices rises from the introduction of the carbon tax are harder to pin down. The logic extends to a belief that just maybe voters will become attached to the money being put in their pockets as they detach from Mr Abbott's scare campaign over the carbon tax. We will see.

But there is a conceptual problem with this budget's approach. The government needs a strong economy going forward to make its numbers add up, and by breaking its promise to implement a company tax cut it will leave those parts of the economy not benefiting from the mining boom weighed down by higher taxes. The handouts might help the public keep spending money. But to assist the retail sector, that would mean the handouts have been poorly targetted.

Perhaps worst of all, the treasurer's approach to this budget is a return to Labor politicking of the past, the ancient past. Not the approach modern Labor adopted under the leadership of Bob Hawke and Paul Keating. There is little growing of the pie going on here, it's mostly a case of leaning on the mining boom and hoping that it gives the government the funds that it needs to buy back some votes.

Not very inspirational stuff, which is a shame because under different political circumstances initiatives such as the National Disability Insurance Scheme and the aged-care package might be hailed as great Labor agenda items.