ANALYSIS, Australia — Tonight, in Australia, Wayne Swan as Australian Treasurer delivered the first budget of the new Rudd Centre-Left Labor Government.

The budget was solid, economically and fiscally-responsible according to ABC commentators like Alan Kohler. The budget was also politically astute, delivering on the promises made in the last election.

2thinknow Building Innovation Textbook

The budget read from the 2thinknow textbook on economic growth in challenging times, and nation-building of innovation cities and regions:

1) Infrastructure investment – ports, rail, institutions, broadband and roads

2) Productivity driven economics – childcare, flexible industrial relations, education

3) Education and Skills – Higher education through university, practical skills through technical colleges (TAFEs)

4) Public Healthcare and Institutions – not solely private healthcare

The creation of Infrastructure Australia, headed by Anthony Albanese, is another strategy called for by 2thinknow, as a global innovation agency. This strategic approach is worth benchmarking in terms of priority setting and could be duplicated, with cultural adaptation, by various cities and Governments around the world.

One area needing addressing is agriculture and food supply, beyond the water plan, to secure Australia’s water supply.

Howard’s Inflation Legacy

In addition, 2thinknow have drawn attention to higher underlying inflation due the last days of the Howard government.

Howard did not count on his reign exceeding 10 years, and running the growth engine too long and too hard, leading to infrastructure, labor, education and productivity short-falls, as there was limited capital investment under Howard’s last days.

Malcolm Turnbull, the right-wing shadow Treasurer takes the view this budget is inflationary, whereas in reality had the prior Government won, they would have continued a policy of not investing in infrastructure.

Turnbull always uses dogma and debate to fight ideas. Turnbull is the most dangerous conservative, one who can argue a case convincingly even when he does not believe in it. Turnbull is a win-at-all costs man, who believes the public will believe what Turnbull tells them.

In the end this first Swan Budget is a good first step, and a priority setting on national economic productivity. This is important.

Why?

Economics solely derives from productivity. Not asset-price bubbles which has been the Howard model, which is non-sustainable.

2thinknow: Sustainable Productivity

It is the 2thinknow view that sustainable productivity derives from 5 main forces:

Effective deployment of labor

Effective increase in national skills,

Effective use of technology to increase productivity,

Containing inflationary wage rises out of step with costs and ,

Containing the cost side of inflation in supermarket, basic services and accommodation.

The 2thinknow view is that the budget delivers on these criteria well for Mr Swan’s first budget for Australia. Intrinsically the budget is economically conservative, according to most Australian economists in initial analysis.

Agriculture and food supply, and which infrastructure needs are addressed first are areas where 2thinknow reserve the right to assess, as well as ICT. And the infrastructure investment must be in the correct areas.

Ports, rail and broadband must be invested in. Roads, to a lesser extent. And these key items of infrastructure must work in Australia, otherwise Australia will continue its rise only as long as China-boom reliance lasts.

The 2thinknow Vision: Australia as Innovation Hub

Australia has an opportunity to build infrastructure and be an innovation hub for the Asian region.

The 2thinknow view is that this is the challenge of the decade.

2thinknow vision is Australia Asian Innovation Region.

This is a good start, although there are many details not yet painted in, the national priorities are correct. The notable admissions were:

Food supply and

Information and Communications Technology (ICT)

Hopefully these will be addressed in future policy initiatives, for this is primarily an inflation-fighting budget.

Well done, Wayne Swan. First Australian Budget, and some vision too.