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Labor is about to do what the Coalition did in the lead-up to the last election. It's about to face reality.
Back then the Coalition garnered support by opposing Labor's changes to the $5000 Baby Bonus. Labor was going to reduce the payment for second and third children on the (quite reasonable) ground that those families already had a cot, a pram, a change table and a baby capsule.
The Coalition's Joe Hockey notoriously evoked China's one-child policy, saying Labor "wanted to penalise anyone that has a second or third child".
"That worked quite well in China," he added.
He also said Labor "hates private health insurance" because it wanted to limit growth in the rebate.
But as the election drew closer the Coalition dropped its opposition to the health insurance changes, dropped its opposition to the Baby Bonus measures, and dropped its opposition to the increase in the Medicare levy to help fund the national disability insurance scheme.
It had to, if it wanted the cost of its promises to add up.
Labor too has been garnering support by opposing measures it'll now have to live with if it doesn't want to send the budget backwards. It talked up its opposition to the Coalition's cuts to foreign aid, before accepting all but a fraction of them, it opposed the Coalition's plan to axe the Schoolkids Bonus before accepting it and it opposed the Coalition's plan to cut $1.2 billion from aged care costs, before penciling them in for itself.
On Friday it will go further and accept another round of Coalition cuts worth billions over the coming decade. On Thursday the Parliamentary Budget Office identified $31.3 billion in measures announced by the Coalition but held up in the Senate, so there's plenty to choose from.
It's important Labor does, just as it was important for the Coalition last time around. Unless both sides can show they are serious about restraining the budget deficit, the ratings agencies will think they don't care. This year instead of giving the budget a tick on the night Standard & Poor's held over its decision until late July, a few weeks after the election.
If Australia loses its triple-A rating, or if Standard & Poor's slaps on what's called a "negative outlook" the Commonwealth will be in for hundred of millions in extra interest payments per year. It'll be Labor's fault, and the Coalition's. Neither has been in hurry to shrink the deficit.
Peter Martin is economics editor of The Age.
