For much of this week we have been preoccupied with one of the joyless undercards of Australian politics, smothered in what we might call the Ashby-Dickson effect, our very own version of Dunning-Kruger. Now that Hanson has reported the NRMA to ASEAN or something (it’s hard to tell), we might rule a line through it and turn our eyes and minds to the main event.
Parliament resumes next week for a meagre three sitting days. Next Tuesday, Treasurer Josh Frydenberg will get to his feet to deliver his first and probably last budget at least for the foreseeable future.
Since 1994, the delivery of the federal budget has been marked by a red circle around the second Tuesday of May on the political calendar.
It has been brought forward five weeks to accommodate a government that has lost not just the parliament but the political agenda, not to Bill Shorten and Labor but largely due to the grumbling and nay-saying from within its own ranks.
It is worth remembering the House of Representatives has sat for just 34 days of the 230 that have elapsed since Scott Morrison became Prime Minister. Nice work if you can get it. If we are to assess the productivity of our federal MPs simply by the days they bother to turn up, they would be down in the nether regions of the scale next the band members of Metallica popping into a recording studio every other month to continue the torturous work on their latest album.
After the seat of Wentworth was lost to the crossbench, the government knew it ran the risk of losing the parliament. Not so much, perhaps, that they would be rolled on the floor by a vote on the confidence it enjoyed or did not and an election called on a date not of their choosing, but more generally that every sitting day would veer into a burgeoning sense of chaos with the government losing control of the procedural and legislative agenda.
All budgets are political with the usual cycle of events in the life of a parliament being a tough budget in the government’s first year in power with a general softening in the second and by the time the third year comes around, the government of the day is delivering a dump truck full of money up to your house.
The circumstances of Frydenberg’s budget are virtually unique and contain the Morrison government’s last desperate attempt to control the agenda and make up ground on Labor. Indeed, it may be so political in nature that the old standard headline, ‘Beer, Cigs Up” may be amended to include the much happier headline, well, to me anyway, of ‘Beer, Cigs Free.”
In the government’s more sordid of dreams, the budget might deliver an unlikely victory but in reality, it is more likely to be a furniture saving exercise, to reduce the size of the loss from a projected 18-22 seats according to aggregated Newspoll surveys to a Labor majority than can be more comfortably knocked off at a subsequent election.
We can safely predict the budget will contain three main themes — the first that the Morrison Government is a master of economic management and it and only it can deliver surpluses. The second, a derisive spendathon in an attempt to win voters back. The third is possibly even more cynical, creating various barely concealed nightmares down the track for their opponents.
We are told Frydenberg has a war chest — an ugly piece of political vernacular at the best of times — as only the chest belongs to the government. The contents are yours and mine. What is in the war chest is rumoured to be around $70 billion. Obviously, that is not loose change that fell down the back of the sofa but there is no mistaking that huge wad of cash exists only because Treasury severely underestimated company and PAYE payments, most of the latter coming from a wallop to taxpayers suffering the financial indignity of bracket creep.
But it does provide the treasurer to make some announcements that are both economically sound and politically engaging. One headline element of the Frydenberg Budget might include a ‘cheque in the mail’ hand out to old age pensioners in the order of a gorilla or so it has been whispered.
For those uncertain of the nomenclature where Australian colloquialisms exchange arboreal primates for dollar figures, a gorilla is a $1000, a monkey $500. Thus, the government might dispatch a payment to OAP’s in the range of a gorilla or a gorilla and a monkey or maybe a monkey, three marmosets and a lemur. Or possibly a gorilla and a mandrill less four gibbons. Anyway, you get the picture.
Simian references aside, this form of spending, famously referred to by former Treasurer Joe Hockey during the Rudd-Swan GFC response as a “cash splash”, might be viewed cynically by the electorate at large but politically there is a lot of upside. Those on the pension are battling away and a few extra dollars will be a Godsend. Many will spend the dough quickly, giving a kick to the retail sector. There are few administrative costs, no cheques in the mail these days. OAPs loom large on the Centrelink matrix and beyond the cost of the payment itself, it is a matter of pressing a few buttons.
The Coalition’s support among those in the 65 years of age or older demographic, is neck and neck with Labor where the Coalition normally leads by the length of the straight. That is astonishing given Labor’s whack on self-funded retirees.
The Coalition needs to drag that support back. How would Shorten and Labor counter a one- off payment? If past performance is anything to go by, it would be struck mute for a day or so and then offer meek agreement.
The more problematic issue for the Treasurer is tax cuts across the board for several reasons. The mood of the electorate in recent times is more interested in service delivery than a $10 or $15 a week, large Quarter Pounder meal tax cut.
The other approach is to announce investment in education, health and transport infrastructure but it is also fraught as there is considerable lag between announcement and the turning of soil. The Morrison government does not have time on its side.
The reality is the Morrison government will deliver a budget filled with spending promises it is not likely to have to keep.
Therein lies the other tactical ploy of the budget — to leave so many landmines in the budget that in government, Labor will be faced with making unpopular cuts or lose control of spending. Never mind how ugly the politics might be. The Labor Party is a past master at the planting of surreptitious budgetary explosives. Depressingly, both major parties do it. When faced with a choice between the national interest and their own, the majors don’t spend a lot of time fretting on the moral dimensions.
Frydenberg’s challenge is to get the balance between responsible spending and sensible politics. The Morrison government may well beyond saving but this is its last chance at a recovery.
This column was first published in The Australian on 29 March 2019
It is not a cut, the coalition just wont continue funding Emergency assistance organisations. This is the cons DNA, take from those that need it most and give to those that have the most. the good old treacle down scam. It all sticks to the top.
https://www.theguardian.com/australia-news/2019/mar/30/coalition-wont-commit-to-extend-funding-for-emergency-aid-groups
It certainly does “all stick to the top” when this lot of wealthy schemers can’t even find it in their icecold hearts to help Newstart recipients with that $75 for just ONE power bill!!
The unemployed in this country are unfairly vilified by the inaction of the smallest percentage of these folks who barely survive under the poverty line & that is week in, week out. There are precious few jobs for the unskilled & if they land one it will be casual & often only a few hours a day or week. This removes them from unemployment statistics but they can’t eat or pay rent. They have to rely on the kindness of others to get by but this government doesn’t even try to conceal their loathing of these people.
“If you have a go, we’ll give you a go.” Liberal slogan.
“To be wealthy and honoured in an unjust society is a disgrace”
Confucius
I like a bit or a lot of cash splashed my way as i’m funny that way, but the last time it happened was when that megalomaniac, Rudd was at the helm, and that turd never got near my vote. Still, i was grateful and the coin splashed and smoked its way back into the economy before he was on his next flight.
But we should at least spare a thought for Josh F. This poor bloke, who’s as likeable as Hockey but more capable, has been working harder than anyone in parliament, bar the PM portraitist, or sculptor, yet is akin to the ph.d student just about to write The End to his 6 yr and 90 000 word thesis o nly to find that it has been disappeared by Word – never to be seen again. He at least deserves to keep his seat.
btw, Henry – i don’t share your confidence, though i agreed with you on Trump, but i believe it won’t be as bad as expected. And if you’ve read Hartcher’s installments on Turnbull you would have noted that he is no Dickens, that he takes all week to say little, and that he failed to point out the obvious in that it was Turnbull who destroyed the liberal party, from his arrival, and in taking down a leader who not only won in a landslide but would have also seen off Shorten years back. If Hartcher’s long winded wind pointed out anything it was the obvious, in that Turnbull went to the electorate unable to spruik the achievement of the Abbott govt; stopping the boats, trade agreements and no carbon tax. Not to mention scaring the bejesus out of Putin and giving Philip a much needed and deserved gong.
Apologies for the loquacity.
“Not to mention scaring the bejesus out of Putin and giving Philip a much needed and deserved gong”.
Bless you, dear Milton but let me break it to you as gently as possible: “The Day of Abbott is OVER!” yes it’s gone, done and almost dusted.
Right now Tones, also known as the “Whirling Dervish”, is engaged in a Political life or death battle with the charming Zali Steggall and Zali has Professor Tim Flannery, the noted mammalogist, paleontologist, environmentalist, conservationist, explorer, and public scientist in her corner.
Does Tones have an answer for Zali, one possibly hopes he has and we shall know very very soon. Cheers
Bought my first iPhone from an Indian in Perth via e-bay. Stimulating the Australian economy by zero percent.
There never was a carbon tax Milton
they’re rooted…..ta ta leaners nepotists pilferers
A tad off topic Mr. Insider but we see you on “Australian Crime Stories” and who doesn’t like a good Crime Story, I know I do. Cheers
https://www.9now.com.au/australian-crime-stories
The Coalition has just doubled all government debt accumulated since Federation. In under six years.
In Julia Gillard’s last full financial year, 2012-13, total debt taken on was just $23.4 billion. This was set to fall steadily thereafter. Before the 2013 election, the heads of Treasury and Finance projected the budget to be in surplus in 2015-16, with debt to peak that year before declining.
The Coalition then changed Labor’s settings on both revenue and expenditure and blew out the debt further and further.In its first year, the Coalition added a thumping $62.1 billion. That was followed in 2014-15 by $49.3 billion. Another $51.7 billion was borrowed in 2015-16, surpassed by a staggering $80.6 billion in 2016-17.
By April 2017, the Turnbull Government had doubled the debt Labor took under six years to accumulate – through the worst global recession in 80 years – $213.2 billion.The Coalition did this in just three years and seven months. During a period of robust global recovery. No pressing need for economic stimulus. And no infrastructure investment or other benefits to show for it.
Poisoning the Well: Liberal spending splurge. “The explosion in government spending which suddenly ramped up last May will leave the incoming government buried in debt but worse, it will leave whoever wins the impending federal election tied to billions of dollars in spending commitments which never went to tender.
here have been $153 billion in “amended contracts”, or untendered contracts struck by the government between March 2016 and February this year, The other point to make about the apparently reckless binge on untendered contracts is that much of it is struck directly with corporate entities of foreign manufacturers which are domiciled offshore. This means that billions of dollars are escaping Australia’s tax net.”
https://www.michaelwest.com.au/poisoning-the-well-liberal-spending-splurge-to-bury-labor-in-debt/
Sounds like, from what you say, Dismayed it is not a good idea for Bill Shorten to become PM if as you say the “well is poisoned”.
Goodness, no surprises. Cheers
“In the first eight years of the present decade, consumer spending – which typically accounts for just under 60 per cent of gross domestic product – has been slower than in any decade in the past 60 years.”
“The biggest component of household income is income from wages. Its real growth in the present decade has been slower than in any of the five preceding decades.””Which brings us to the national accounts’ bottom line – growth in real GDP. It’s averaged 2.7 per cent a year so far in this decade, which is less than in any decade since the 1930s.
“And get this. More than half the real GDP growth so far this decade is directly attributable to growth in the population. Growth in real GDP per person has averaged 1.1 per cent a year – equal to its performance during the 1930s, and slower that anything we’ve had in between”
Takes a few years to get rid of the stupidity inherited from a previous government.
Stiff like fully funded and then in the small print over the period of the current estimates.
Ah well, in 6 years time the Libs will be back in attempting to repair the stupidity that Shorten is bound to introduce.
Such is the cycle in this country with one exception – Hawke and Keating.
Shorten should not follow any cash splash and show some fiscal rectitude. He will gain some respect. Howard did the cash splash in 2007 and we are still paying off his $90billion structural deficit. Morrison will spend as much as he can so that Labor will have nothing left for its programmes. Any ‘surplus ‘ is an illusion until it happens and one thing is certain it won’t happen under Fraudenberg’s stewardship because the Libs will be gone Blowfly. IF, and it is a big IF, Fraudenberg’s forecast budget surplus for 2019-20 actually happens, we won’t know it until September 2020, some 16 months after a May 2019 election – at this stage, it is merely a promise, a forecast, a hope, a wish and a LOT globally can happen between now and then. And hey, don’t forget gross debt has surged to a record $540 billion under the Looters. Strange how we never hear about ‘end the debt’ anymore since the Libs have scaled new debt heights. Jack is right about the budget being linked to bracket creep and tax collections but it is also linked to the surging iron ore price. There might be no budget surplus in 2019-20 if the iron ore price drops just $5 a tonne lower than it is now. Every US$1 move in the iron ore price would impact the budget bottom line by $420 million . I dunno why the Looters keep biting the hand that feeds us-China. China could break our economy if it kicked us off its tit.
I love how you condense the facts & figures mate.
Seriously informative.
$540 billion gross debt!! Cancel that credit-card immediately.
Last two sentences…priceless Bman.
I’ll miss you when this blog ends. 💚
……bbbbbbut wait ders more!! Who REALLY are the better economic managers?
1983 LNP hand to ALP. Economic ranking 20th in the world
1996 ALP hand to LNP. Economic ranking 6th in the world
2007 LNP hand to ALP. Economic ranking 9th in the world
2013 ALP hand to LNP. Economic ranking 3rd in the world
2018 LNP preside over an economy currently ranked 18th in the world
Looks like Labor have to clean up another Liberal mess!
The seven highest TAXING years in the history of our country have ALL been under Liberal governments. The ten highest SPENDING years in the history of our country have ALSO been under Liberal governments. There have been only seven occasions where the tax to GDP ratio has been in excess of 23.5 per cent of GDP and all seven were under the Howard government.
Vote 1 the Macaque.
Very entertaining read as always, Mr Insider and the Budget next Tuesday will indeed form a major part in the re-election of the Morrison Government.
From what we hear so far it will be a bit like Santa arriving with “goodies” for all capped by being the first Surplus Budget since the Howard years, a top class achievement imho.
Then soon after, the Election should be called and what a wild and woolly Campaign it promises to be for all Parties as they strive for survival in many cases.
The People of Australia always get it right imho, bless this great Democracy of ours.
P.S. I remember once the great ex PM John Howard gave a pre Election Cash Splash which went down a treat.