Bad Budget could force Libs to 'break promises'
A WA Federal Liberal MP has signalled a Tony Abbott-led government may have to consider "reversing" election promises, with figures expected to show the poor state of the Federal Budget.
In the wake of Premier Colin Barnett's decision yesterday to reverse the State Government's policy on solar feed-in tariffs, Canning MP Don Randall said the coalition on taking office would likely come under internal pressure to break some pre- election commitments.
"Governments after elections quite often find themselves in difficult circumstances and I suspect that should we be the government and we see the state of the books, there's going to be a bit of that sort of talk from the coalition because governments do do that," Mr Randall said.
"Particularly in the first part of their newly elected term, they find the circumstances may have changed or the finances - in the case of both State and Federal governments - have been eroded given the downturn in the Chinese economy.
"You can't get away with it unless you communicate with the electorate and just to arrogantly announce things doesn't go down well with the electorate."
His comments came ahead of today's release of the pre-election economic outlook by the departments of Treasury and Finance.
Unlike the Budget or the recent economic statement, the pre- election outlook is solely controlled by bureaucrats rather than politicians.
Already shadow treasurer Joe Hockey has questioned the worth of the figures but Mr Abbott yesterday conceded the coalition had to work with them.
"The PEFO figures are the best figures we have got, no doubt about that," the Opposition Leader said.
At the past two elections the pre-election report mirrored the key forecasts in government- controlled statements released just days earlier.
The Budget bottom line, in both the 2007 and 2010 PEFO reports, barely moved. That is why today's report is expected to contain forecasts very similar to the economic statement released by Treasurer Chris Bowen less than a fortnight ago.
That showed a $33.3 billion collapse in expected revenues over this financial year and the coming three, largely because of a bigger than expected fall in the terms of trade.
A higher unemployment rate, tipped to average 6.25 per cent this financial year, was also tipped to increase Budget costs.
That left the Government forecasting a $30 billion deficit in 2013-14 and a $24 billion shortfall the following year. A surplus, which is partly based on some optimistic forecasts, will not be reached until 2016-17.
It was in stark contrast to the May Budget forecasts which joined Treasury's projections of recent years in falling well short of expectations.
Prime Minister Kevin Rudd said with the Opposition pledging to cut spending it risked driving the country into its first recession since 1991.
The single biggest election promise this campaign has been a pledge by the Opposition to cut the company tax rate 1.5 percentage points in a move that would cost $5 billion.
