Rudd's first Budget promise: he'll save as he's never done before Kevin Rudd finally makes a promise on the deficit: KEVIN Rudd has pledged to bring the budget back to balance on schedule in 2015-16 but weak jobs growth and company profits mean Treasury's pre-election budget update will show further deficits unless Labor acts with pre-emptive spending cuts... Despite Julia Gillard and Wayne Swan's failure to honour their promise to deliver a surplus this year, Mr Rudd (has) pledged to meet the May budget forecast of ending the budget deficits in three years. "We're committed to returning the budget to balance in 2015-16," he said. However, the June labour force report, released yesterday, showing unemployment rising to a three-year high of 5.7 per cent and almost no growth in the hours being worked, reveals the daunting budget arithmetic. The number of jobless rose by 75,000 to a 15-year high of 709,000 in the past financial year as the unemployment rate rose from 5.2 per cent. Some economists expect it to pass 6 per cent by the end of the year - a level not seen since 2003... The government is counting on strong employment and wages growth to finance the return to surplus, with PAYG receipts in 2015-16 forecast to be $40 billion, or 27 per cent, higher than in 2012-13... Stephen Anthony, principal of the consulting firm Macroeconomics...who formerly worked for the Department of Finance, estimates that government spending cuts in the region of $10bn-$15bn a year would be needed to be certain of a budget surplus in 2015-16. Rudd the saver, not spender? I find that very hard to believe. This new prudent Rudd isn't familiar to Judith Sloan: THE main theme of the National Press Club speech yesterday by Kevin Rudd, PM Mark II, was along the lines: ..." What's a bit of debt and deficit - I saved the Australian economy from recession and prevented unemployment from rising..." But does the evidence back up Rudd's self-congratulations? What is there to show for a government debt that now exceeds 10 per cent of gross domestic product (up from minus 4 per cent when Labor came to office)? Here are the facts: The spending spree that Rudd embarked on was Whitlamesque in scale. Government spending rose by 13 per cent in 2008-09 and by another 4 per cent in 2009-10. The budget deficit reached $54 billion in 2008-09 or 4.2 per cent of GDP. The budget has still not returned to surplus, after five years. The budget is not expected to return to surplus until 2015-16. And what was the impact of Rudd's spending-on-steroids? Two rounds of cash handouts that appear to have been largely saved. Wasteful spending on an ill-conceived roof insulation program that resulted in deaths. An extremely expensive school-hall building program that was in full swing well after the global financial crisis had faded. We can trust their promises to be prudent or be guided by their record - but not both: Treasurer Chris Bowen has said commodity price changes and the declining currency were both affecting government revenues and Labor would not rush back to surplus before the scheduled balance in 2015-16. "To race to surplus would be a hammer blow to economic activity that wouldn't be sensible," Mr Bowen told ABC Radio on Friday, adding that achieving a balance in two years as "not without its challenges." Mr Bowen said changes in terms of trade were reducing revenue, while the falling dollar benefited government revenue. "Terms of trade reductions are having an impact on our economy, on our government revenue â they're down substantially," Mr Bowen said... "Against that you've had the Australian dollar fall, which is good for government revenue â all this will need to be calibrated as we go," Mr Bowen said as he declared any budget changes would have to be offset.