With that promise now abandoned, the government has entered the 2013 election year with no budget strategy at all. Julia Gillard's office is under pressure from both spending ministers and backbenchers to relax the restraints demanding new spending measures be matched by savings.
With the government still lagging in the polls, there is pressure for some pre-election spending.
The argument is that the Coalition will slam Labor for running a deficit anyway, so it might as well run a bigger one and gain some votes with new spending that reflects "Labor values".
The Coalition showed in 2010 it was prepared to bid for votes with a big-spending election campaign and is likely to do so again. The spending sirens say Labor would gain little politically from donning a budgetary hairshirt.
The Treasurer promised to revisit the budget strategy early in the new year while declaring the government would continue to exercise restraint in its spending.
However there is at present no articulated path for returning the budget to surplus. The status of Swan's own guidelines - including that the budget would return to surplus once the economy was growing at its long-term trend rate - is unknown.
The government's financial position has improved since the end of the year, thanks to an unexpected surge in iron ore prices, which will lift mining profits and company taxes. But the true state of the budget is hard to gauge in the wake of the massive financial engineering undertaken in the lost cause of reaching the budget surplus target.
Since the second half of 2011, the budget bottom line has been boosted by more than $10 billion as a result of shuffling of spending out and of revenue into the current financial year.
For example, $2.7bn in carbon tax compensation was pulled back from 2012-13 into 2011-12, as was $1.4bn in infrastructure spending, $1.1bn in infrastructure grants and $1.4bn in Queensland disaster compensation. Changes to accounting practice for the Future Fund added $417 million to 2012-3 revenue, while about $650m came from raids on "lost" superannuation accounts and unclaimed money.
To get a sense of the scale of this budget window-dressing, the funds involved would be sufficient to cover the salaries of 100,000 public servants if real money were involved.
The latest mid-year budget update showed Treasury has real doubts about whether a surplus could be met in the next financial year either.
A clawing forward of company tax payments was calculated to add $5.5bn to the 2013-14 budget bottom line.
While there have been some genuine savings, such as curtailing the baby bonus and tightening eligibility for family tax benefits and sole parent benefits, they are small relative to the budget "enhancements" that serve no economic purpose whatsoever.
The government cannot simply come out with a new date for achieving a surplus. After the countless avowals of a return to surplus this year, any arbitrary date would carry no credibility.
What is needed is greater clarity about the true budget position and the steps the government will take to eliminate its deficits. Following his promised budget strategy review, Swan needs to make a statement that addresses this.
The Business Council of Australia, among others, has argued that stronger budget rules are needed. The BCA argues that the present limit on tax as a share of gross domestic product should be made a "hard cap". It has not spelled out how this would be achieved, but other countries have put budget rules into legislation.
The council also wants firm targets set for the level of budget surplus to be achieved so that a reserve, equivalent to 3 per cent of GDP, is accumulated to deal with economic downturns.
International Monetary Fund research says the use of rules is associated with improved budget performance, although it found that many countries abandoned their rules when the global financial crisis hit.
The idea behind budget rules is that politicians cannot be trusted to impose their own discipline without them.
Each interest group pushes their minister to press for higher spending without regard for the broader effect of all ministers doing so.
The IMF notes, however, that budget rules can both reduce the ability of a nation to respond to financial crises and risk "undermining transparency due to incentives for creative accounting".
Strengthening the rules in legislation would increase those incentives.
Ideally, budget rules and targets should be an expression of government policy, not a constraint upon it.
The use of financial sleight of hand to meet budget targets should be as pointless as cheating at patience.
Good budgeting is not about compliance with rules and targets. It is about ensuring the government's finances are sound in both the short and long term, recognising that taxation is a burden on the economy that should be lightened as much as possible. Truth in budgeting should be the first principle.
The best reassurance the government could give to its budget credibility would be to boost the resources of the new Parliamentary Budget Office, empowering it to prepare independent budget estimates as does the Congressional Budget Office in the US and the Institute of Fiscal Studies in Britain.
The PBO is presently barred from producing an alternative budget or from generating its own forecasts.
It would be a statement that the government has sufficient faith in its budget bona fides that it is happy to expose them to independent scrutiny.
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