Australian budget walks fine line between growth and austerity

The Australian government is expected to announce a A$5 billion (US$3.8 billion) fund for major public transport projects as part of its federal budget, a spending plan under more scrutiny than usual as it doubles as an unofficial election campaign launch.

Treasurer Scott Morrison, presenting his rookie budget on Tuesday, faces the tough job of delivering a pro-growth, voter-friendly spending plan without any leeway to offer “big bang” reforms or significant tax giveaways.

As Australia heads to an early election on July 2 after political wrangling that resulted in the dissolution of parliament, Morrison and Prime Minister Malcolm Turnbull are cautioning that the country has to “live within its means”.

“It’s not a typical budget,” Morrison told reporters in Canberra on Monday. “This is not a time to be throwing money around.”

“You have to spend money wisely, you have to target it and the ultimate test is will it drive jobs and growth - we’ll afford the things that need to be afforded in health and education.”

The ruling Liberal Party-led coalition government is running neck and neck with the Labour Party, latest opinion polls show, putting Turnbull in a tough position as he seeks his first mandate since wresting the top job from the hugely unpopular Tony Abbott in a leadership coup last year.