Gillard Government running out of time and money to woo back voters TOUGH SELL: Prime Minister Julia Gillard and deputy Wayne Swan want voters to put the national interest ahead of self-interest. TUESDAY'S Budget will be a political document with an eye to the fateful second Saturday in September when Australian voters pass, a probably final, judgment on Julia Gillard's Government. Wayne Swan's sixth national balance sheet and economic road map will probably break many of the orthodox budgetary rules - especially the one insisting a pre-election Budget has little if any bad news - but he will try to tell a story about values and priorities. In lounge rooms on Tuesday night and at coffee shops, around water-coolers and in lunch rooms the next day, the conversation might be a bit different, if people are talking about the Budget. Republican US president Ronald Reagan asked one of the great cost-of-living questions when he challenged incumbent Jimmy Carter in 1980. In a presidential debate, Reagan turned to the audience and said: "Ask yourself, are you better off now than you were four years ago? Is it easier for you to go and buy things in the stores than it was four years ago? In the uncertain economic times and against Carter's weak leadership, the answer was an emphatic "No." If Australians ask themselves this, the answers will be at best mixed but generally negative for Gillard (below) and Labor. Economic indicators are good for the Government - growth is remarkably strong, inflation is under control and steady, unemployment has edged up but is low by historical and international standards and interest rates are at a 50-year low. However, set against tight household budgets often driven to despair by unavoidable costs such as electricity and a message of gloom from many business leaders and Tony Abbott's Opposition team, the Government is on the back foot and has to convince voters they are in better shape than they think. The other question that is bouncing around in the minds of voters - and will no doubt be exploited by the Coalition - is what economic interest do people have in voting Labor. Voters are not in the habit of voting against their economic interests, although there are examples where people do so in favour of particular social values. This is unlikely to be the case in September. The problem for Swan is that he's in no position to bribe voters, even if he wanted to. The last big bribe in Australian politics was offered on the second day of the 2007 election campaign when John Howard and Peter Costello bet the house on tax cuts. It was a losing but very big bet which has had an enduring cost to government. Over the four years from the July 2008 start date for these generous tax cuts, the full cost to the Budget was $65 billion and that fiscal impact still shows up on the balance sheet. The Coalition argues it was spending money it had - the last big payday of mining boom Mark I - but Labor counters that the cost beyond this initial period has not been sustainable. History aside, Labor's immediate problem is the Government has run out of revenue to fully fund its existing priorities, let alone think about any sweeteners for voters. After being whacked by the global financial crisis, which saw revenue fall short of expectations by $40 billion and growth contract to just 0.5 per cent at its nadir, the economy looked like resuming its booming terms of trade-inspired trend, fed by a renewed appetite in China for coal and iron ore. Two economic unknowns upset the well-laid plans. The enduring strength of the Australian dollar was foreseeable but its full impact became apparent as it happened. The perverse way growth has behaved was anything but predictable. The high dollar is a consequence of the weakness of other developed economies and the attractiveness of Australia as a safe haven for investors. With a recovery that is likely to take up to a decade to play out, there is no quick way out of this. The growth impact is something again. For three quarters, the strength of the Australian economy was easy to spot in growth figures and employment outcomes but while this paper expansion looked healthy, the reality - expressed in nominal value - didn't match. That nominal growth lags behind real growth - for nine months so far - is something that has never happened before. The budgetary consequence is the expected rebound in revenue from the mining, capital gains and company taxes didn't occur and the Government is short by $17 billion. Worse still, this will not be a blip on the balance sheet but will be there across the coming four years of the forward estimates. These blows to the Budget will be apparent on Tuesday. The fact the mining boom has gone off the boil means those benefits we were told a year ago would be spread around aren't available, causing the Government to drop its plan to increase Family Tax Benefits on July 1 (worth $1.8 billion and would have added $100-$600 to the annual household budget of many families). At the same time the European carbon market has hit the doldrums with the price of emissions down to less than $4 a tonne - as against the Treasury forecast of $29 a tonne in 2015, when the Australian price floats. The losers out of this are people earning less than $80,000 who were to receive the next round of carbon compensation tax cuts in July next year, worth $1.4 billion. There will be further big savings on Tuesday, although it's unlikely there will be any wholesale hit on middle-class welfare as some have suggested, but there won't be any tempting handouts for voters. This leaves the Government's response to the question of what economic interest voters have in supporting Labor in September a very hard sell. Swan will argue the Government is about protecting jobs, maintaining growth and delivering those social reforms that have a longer term economic dividend. He will ask voters to put the national interest ahead of immediate self-interest and be patient. It doesn't come much more high risk than this. Dennis Atkins is The Courier-Mail's national affairs editor. Twitter: @dwabriz