Wednesday, May 09, 2007

The Australian Budget 2007 - initial reactions

Well, I said in my first post on the latest Australian budget that I was not going to make a detailed comment until I after the dust had settled. That remains true, but there has been so much comment today that I could not resist an initial comment.

This is a very modern budget, one set firmly within the parameters dictated by modern approaches to public administration and policy. This, as those who read this blog on a regular basis will know, is not necessarily a compliment. It is also a very complex and clever budget.

The problem, as always, lies in the detail. Here we can make a clear distinction between what is done and the way in which it is done. As commentators have dug down today, some of the problems have begun to emerge.

Take the future fund for higher education. This strikes me as a good idea, although it is not the fresh, newly minted, idea that the Treasurer would have us believe. After all, the idea that Governments should create sinking funds to meet future needs is in fact very old. That said, there are now some clear problems with the application of the the fund approach.

Let me take just one example.

Funding from the fund will be subject to competitive principles based on criteria laid down by the Government with the final decision made by the Minister. Fair enough perhaps.

But the PM said today, as an example, that one criterion might be the matching funding raised from the private sector. This immediately builds in a bias in favour of older institutions with more alumni and a location near private funding sources. I don't think that this is a good thing.

I will continue to monitor. Then I think that I might focus my comments on the dynamics introduced by this budget.

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