Budget 2023: Let the Responsible Economic and Strategic Mentoring Continue
By Denis Bright
Supportive coverage by the Illawarra Mercury (1 May 2023) of the Federal Treasurer’s forthcoming budget preparations were already part of a groundswell of new support for the Albanese Government during the pre-budget period.
There is a strong consensus from commentators that Australia cannot afford another round of neoliberal policies. In difficult times, the budget responses have been carefully calibrated to halve the inflation rate in the forthcoming year while delivering relief to the most vulnerable through modest levels of rent assistance, affordable housing initiatives, improvements to the bulk-billing rate and protection against electricity and gas cost spirals.
Youthful treasurers like Dr. Jim Chalmers helped to revitalize the Labor Party in the past at a time when change in the direction of public policies was absolutely essential. Bill Hayden’s career as treasurer was cut-short by the dismissal of Gough Whitlam by Governor-General Kerr in November 1975. Paul Keating as Treasurer (1983-91) continued on as Prime Minister (1991-96). Labor’s unexpected victory at the 1993 elections offered a way out of the worst of the post-1945 recessions which brought double digit rates of both unemployment and interest rates.
Dr Chalmer’s career is in its ascendency. His electorate of Rankin includes large sections of Logan City. Dr Chalmer’s budget address commenced with an acknowledgment of the critical awareness of his electorate which he also carries into the corridors of the rich and famous like the G20 Summit in Washington on 12-13 April 2023 where commitment to neoliberal values still rides high amongst opinion leaders and mainstream media commentators (Treasurer’s Budget Address):
Speaker,
We acknowledge the Ngunnawal and Ngambri people, the Yagara and Yugambeh Country around Logan, and all the First Nations of Australia – their Elders, customs and traditions.
And we recognise the opportunity we have this year to move forward together, listening to each other, in a spirit of unity and respect.
After ten years in opposition, neoliberal shadows still lurk over budget processes which are controlled by strict protocols across key federal departments and even with strategic allies whose grim warnings feed onto the Office of National Assessments (ONA) and the various tiers of the Defence Department and its intel networks. The current budget shows that progressive is still possible in the short-term.
Through good economic management and a temporary improvement in trading relations with key trading partners in the Indo-Pacific Basin, a projected deficit of $56.5 billion for 2023-24 in the federal LNP’s budget has been transformed into a likely surplus of $4 billion.
These changes have been delivered without the austerity measures imposed by Joe Hockey’s 2014 budget after the election of Tony Abbott. Instead, Dr Chalmers has delivered a commitment to:
- Provides cost‑of‑living relief that is responsible and affordable and prioritises those most in need.
- Delivers historic investments in Medicare and the care economy – making it easier and cheaper for Australians to see their doctor.
- Broadens opportunity by breaking down the barriers of disadvantage and exclusion.
- Lays the foundations for growth by embracing clean energy, and investing in value‑adding industries, people, skills, technology and small business.
- And strengthens the Budget – with a surplus forecast for this year, with less debt and smaller deficits compared with recent budgets.
For the first time there is a Women’s Budget Statement that is authorized by the Treasurer and Katy Gallagher as Minister for Finance, Women and the Public Service. Amongst the issues covered in this statement is the extent of the Gender Pay Gap.
Passage of the Voice Referendum should see an Indigenous Statement added to next year’s budget papers.
Addressing the need for structural changes should require more details of perceived threats to Australia’s international security. Fortunately, this is not a khaki defence spending budget as shown by the charts for comparative expenditure growth rates into the medium term from Budget Paper 1.
The real costs of the AUKUS submarine deals are deferred into the medium term with some items listed as Not for Publication (nfp) because these costs are not fully known. This is a sellers’ market for defence hardware. The scope for wriggle room by the Australian government in the event of a sudden cooling in international tensions is not fully revealed in Budget Paper 2:
Concerns from commentators about the potential inflationary impact of Dr. Chalmers $14.6 billion in modest relief to the most vulnerable Australians overlook the warmings in Budget Paper 1 on the open-ended costs of the future AUKUS deals.
Real structural changes in priorities will take time to evolve. Welcome advice can be expected from the Greens and other members of the cross-bench as well as from a whole network of community activists. This government can take advice from a wide variety of sources and may have to amend some proposals in the senate where the government lacks anything close to an absolute majority.
As mentioned in a previous article on the importance of international factors on our own economic future (AIM Network 3 May 2023), interest rate settings in Britain and the US have an important impact on economic projections in middle-sized economies like the Australian economy. The US Federal Reserve raised interest rates to their highest level since September 2007. US interest rates are a long way off the disastrous situation in the early 1980s as shown by the trendlines from Trading Economics.
Despite patches of volatility in US financial markets since May 2022, US share prices have benefited from higher interest rate regimes and continued financial exchanges with China in both trade and investment.
Net capital flows out of China have picked up again since mid-2022 as Chinese investors and government agencies take advantage of the new interest rate regimes overseas. While Australia is cautioned to avoid too much Chinese investment, commercial ties between the US and China have picked up under the Biden Administration as noted by the Office of the US Trade Representative even if the data offered on its current web site is more than a trifle out of date for a site which is the responsibility of the US President:
- China is currently the largest US goods trading partner with $559.2 billion in total (two way) goods trade during 2020. Goods exports totalled $124.5 billion; goods imports totalled $434.7 billion. The U.S. goods trade deficit with China was $310.3 billion in 2020.
- Trade in services with China (exports and imports) totalled an estimated $56.0 billion in 2020. Services exports were $40.4 billion; services imports were $15.6 billion. The U.S. services trade surplus with China was $24.8 billion in 2020.
- According to the Department of Commerce, U.S. exports of goods and services to China supported an estimated 758,000 jobs in 2019 (latest data available) (475,000 supported by goods exports and 283,000 supported by services exports).
- U.S. foreign direct investment (FDI) in China (stock) was $123.9 billion in 2020, a 9.4 percent increase from 2019. U.S. direct investment in China is led by manufacturing, wholesale trade, and finance and insurance.
- China’s FDI in the United States (stock) was $38.0 billion in 2020, down 4.2 percent from 2019. China’s reported direct investment in the U.S. is led by wholesale trade, manufacturing, and information services.
- Sales of services in China by majority U.S.-owned affiliates were $59.6 billion in 2018 (latest data available), while sales of services in the United States by majority China-owned firms were $20.6 billion.
Those prized structural changes needed to implement Labor values require a long-term Labor Government with a greater commitment to Australian sovereignty, economic diversification and self-interested economic diplomacy than the now disgraced decade of federal LNP administration. A soft-landing from the US economic downturn and the commercial tensions with China will be a good sign for the Australian economy.
Using the exemplar of the US Trade Representative I would say what’s good for the goose is appropriate for the Australian middle-sized economic gander. More co-dependency between Australia and the wider Indo-Pacific Region including Taiwan might give all participants a softer landing in the forthcoming global slowdown whose economic costs can still be minimized by a good dose of pragmatism.
This responsible pragmatism by Dr Jim Chalmers is surely based on a thorough assessment of the mind-sets of high-profile leaders and their loyal policy staffers at events like the G20 Summit in Washington on 12-13 April 2023 which was never really A Long-way from Logan City as mentioned by one commentator on my previous article about the international pressures on Australian interest rates.
While negotiations with the crossbench and leftist activists will always contribute to the final outcomes from the current budget, the current fetish for minor political parties should not detract from the prize of majority government at least in the House of Representative.
May the responsible mentoring and reform of our essentially neoliberal economy continue at a pace which is tolerable to a still fairly conservative electorate in which our media gurus largely ignore the influence of the global economy on medium term outcomes for Australia into the 2030s.
Until ChatGPT and Bard extend their cut-off dates for media monitoring, our collective future will always be uncertain. I do see some hope in the improved commercial and investment relationships between the Anglo-American financial sectors and the world’s second largest economy with its close commercial ties across the Taiwan Strait. Updates on transits by RAN vessels through the Taiwan Straits are not readily available. A tourist ferry between Mainland China and Kinmen Island in Taiwan is a good substitute for such military jaunts. Crossing the divide is as close as a routine trip from the Port of Townsville to Magnetic Island but passports are still required to cross this artificial divide in either direction.
Hopefully, Dr Jim Chalmers at 45 years of age will be around for a long time to deliver sustainable outcomes for humanity where large sections of the population are disadvantaged at home and abroad as a trillion dollars a year is being spent on defence and intel initiatives in those far-off Anglo-American heartlands in Britain and the USA.
(Stockholm, 24 April 2023) Total global military expenditure increased by 3.7 per cent in real terms in 2022, to reach a new high of $US 2240 billion ($US 2.24 trillion). Military expenditure in Europe saw its steepest year-on-year increase in at least 30 years. The three largest spenders in 2022 – the United States, China and Russia – accounted for 56 per cent of the world total, according to new data on global military spending published today by the Stockholm International Peace Research Institute (SIPRI).
- The real-terms increase in world military spending in 2022 was slowed by the effects of inflation, which in many countries soared to levels not seen for decades. In nominal terms (i.e. in current prices without adjusting for inflation), the global total increased by 6.5 per cent.
- India’s military spending of $81.4 billion was the fourth highest in the world. It was 6.0 per cent more than in 2021.
- In 2022 military spending by Saudi Arabia, the fifth biggest military spender, rose by 16 per cent to reach an estimated $75.0 billion, its first increase since 2018.
- Nigeria’s military spending fell by 38 per cent to $3.1 billion, after a 56 per cent increase in spending in 2021.
- Military spending by NATO members totalled $1232 billion in 2022, which was 0.9 per cent higher than in 2021.
- The United Kingdom had the highest military spending in Central and Western Europe at $68.5 billion, of which an estimated $2.5 billion (3.6 per cent) was financial military aid to Ukraine.
- In 2022 Türkiye’s military spending fell for the third year in a row, reaching $10.6 billion – a decrease of 26 per cent from 2021.
- Ethiopia’s military spending rose by 88 per cent in 2022, to reach $1.0 billion. The increase coincided with a renewed government offensive against the Tigray People’s Liberation Front in the north of the country.
Denis Bright (pictured) is a financial member of the Media, Entertainment and Arts Alliance (MEAA). Denis is committed to consensus-building in these difficult times. Your feedback from readers advances the cause of citizens’ journalism. Full names are not required when making comments. However, a valid email must be submitted if you decide to hit the Replies Button.
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Return to home pageThanks Denis. Why indeed were the voters of the Gold Coast so satisfied with the Morrison Government? Where there was discontent, votes drifted to minority parties like One Nation, UAP and the Liberal Democrats. Preferences were directed preferences back to the LNP.
Will Labor field a good candidate in Fadden which has some pockets of Labor support?
Denis, Thanks for your summary of the federal budget 2022-2023.
Thanks for taking the news out of the shadows, Denis
Definitely a social justice budget for difficult times ahead when the surplus is not expected to last permanently unless countries can stop fighting each other and better direct scarce resources at home and abroad.
The cost of those naval jaunts in the Taiwan Strait could make a contribution to the treatment of those 30,000 cases of tuberculosis reported in PNG each year . Surely that is a big security challenge for Australia as a responsible middle power.
Be daring and buy more fatty foods say the high profile advertisements. I think that being daring needs more political participation.
A very insightful unpack of this year’s budget – thank you!
I think that the budget has pretty much ignored the 4 million people living in abject, grinding poverty. $2.85 a day for people on Jobseeker? That’s not even a bus fare to their corrupt JSAs or mutual obligations.
And energy bill relief is cold comfort to the 240,000 (at least) homeless people.
30,000 houses in 5 years? A tiny drop in the surging ocean of homeless people.
A paltry effort with Medicare, especially GPs. That’s not even within a chasm of helping more people to see a GP. And it’s a false economy. Homeless people, without medical care, end up in hospitals costing more than helping them would.
Surely Dr Chalmers can modify the Stage 3 tax cuts before they are required in 2024-25. This was a bad promise and should be reversed. in favour of commitments to The Voice of our Indigenous People and their willingness to participate in the national economy to regain their pride in heritage.
Making Medicare work again is a way of making Australia a world leader and delivering longer-term prescriptions which ease the pressure on GP clinics. Keep up the great work Jim Chalmers.
Great times to be alive Burleigh Waters. This budget is responsible and appropriate to our times. I hope our expenditure on the submarines and the stage three tax cuts are deferred by changing circumstances in the year ahead. What happens if peace breaks out and Australia is stuck with the bills for all that military equipment?
Chalmers did a good job.
ps
who still thinks the bandit is not a loonie?
Thank you Denis
An even bigger thanks to you Nicky, I like you saw the $2.85 as the same insult.
No Denis, I do not share your admiration for chalmers (lower case intended).
This budget like his other budget, is your classical “panem et circenses”, a neoliberal budget.
It does not fool me.
What planet are you people on? We have an appalling housing and rental crisis, dwelling starts have plummeted, and Albanese has pushed migration close to 400,000. Allegedly “falling” to 315,000 next year, but that is still 4x the historic average.
Let the hunger games begin. If “Albanese From The Projects” had been born into the Australia he has created, he wouldn’t stand a chance. Under Treasury guidance, the main thing he will do is widen inequality. Why are you all so happy about that?
The best that can be said is that it’s better than we’d get from the LNP. Still no action on homelessness, on poverty, on climate; stiill sticking wiith those ridiculous tax cuts and AUKUS and FF subsidies and privatised JSAs and the punitive treatment of unemployed people.
The improvements to Medicare are a good start.
Stephen S:
Given that this mob have been in government for barely 12 months, it’s ludicrous to talk about Albo and “the Australia he has created”. Today’s Australia is – if it can be attributed to any single person – essentially a product of the Lying Rodent, Little Johnny Howard.
Thanks to Senator Don Farrell’s (Trade and Tourism Minister) visit to Beijing on 12 May, the way is clear to remove trade and investment barriers between our two countries in the spirit of the existing free trade agreement. Chinese investment in Australia is so important to protect us from the forthcoming economic slowdown. China also has investment and trading ties with Taiwan and South Korea.
Australia should continue to foster these partnerships to strengthen our ties across the region.
Money wasted on sending our RAN vessels on Freedom of Navigation visits around Hainan and Taiwan is a waste of money. Jetstar used to run tourist services to Hainan before COVID-19 and there is a boat train operating from Gunagzhou to Hainan Island.
Regular ferry services operate from Xiamin City in China to Kinmen Island in Taiwan which is just a few kilometres offshore. Perhaps our naval personnel could avail themselves of these tourist connections. From Kinmen, Taiwan’s Eva Air can take the personnel on to Taipei. This is a much better was of getting around than jaunts in naval destroyers.
I don’t think that our Collins Class submarines are actually up to the task as they are regularly in dock for repairs and their technology is outdated even in stealth mode operations. Only one submarine is fully operational most of the time.
Not on your planet, Steph, Labor cannot evan get $10b into debate because doing something is not acceptable to the loonies whose perennial bleat is baaa not enough baaaa more baaa less baaa baaa baaa is right up there with dutton’s naaay naaay naaay. Looks like repeat of senile bobbie’s decision on a carbon price and we had 11 years of F-all.
ps
Well said, Leefe!
The bandit’s loonies have an agenda to use lib preferences to unseat enough labor to demand a coalition I have no objections to ambition but they are happy to allow the libs to rule to achieve their aim is sad.
It seems that the government Budget in Australia has turned into an annual Mardi-Gras for nerds.
The media spend weeks prior speculating on what should be in the budget then they forensically dissect the Treasurer’s statements, they hunt down ‘experts’ who will say whatever they want on a given day. Then you have the opposition who will tell you it’s a lost opportunity but will never specify what they would have done and, of course, if the government delivers a surplus albeit a small one the opposition will tell you that a drover’s dog could have done that and why wasn’t it a bigger surplus.
I believe that we have a good government in place at the moment and compared to the last lot we have some very committed and talented people looking after our national interests : I think Jim Chalmers is competent, qualified and focused and that he has a lot of budget repair work to do after the hapless economic management of the coalition.
Stephen S your data on migration numbers is faulty : must try harder !
Thanks for the libel, Terence. My migration data comes direct from the mouth of Chalmers himself. Read Appendix A of his Budget Paper 1. What also comes direct from Chalmers himself, is the per capita recession. 1.5% economic growth versus 1.7% population growth.
For sure, it is largely Howard who made Australia the way it is. The question is, can we ever fully escape him?
I have heard that The Dunce’s budget reply will be short and to the point: “NO!”
Sorry, Budget Paper 3.
The housing Australia future fund designed to invest the $10bn and then spend the earnings, up to $500m a year, on affordable and social housing projects.
Albanese said that over the first five years the fund would build 20,000 social housing properties, with 4,000 of those to be allocated for women and children fleeing domestic violence, and for older women on low incomes at risk of homelessness. Another 10,000 affordable housing properties would be made available for frontline workers.
This morning the senate were due to debate this Bill which is, of course, opposed by the coalition, One Nation and the Greens.
Not only are the Greens not prepared to vote for this legislation they also voted down the move to debate it (at which time they could have introduced their amendments.)
Back to Groucho Marx Whatever it is I’m Against it https://www.youtube.com/watch?v=3cKUppvjJuw
Terence,
Please curb your enthusiasm! Especially their unseemly haste to latch on to the USUKA nukular youboat deal, sight unseen, and their to date unshakable commitment to the LNP’s Stage Three tax cuts, legislated long before both COVID and Ukraine calamities, defo takes the shine off that Labour.
Well, that truly is a ridiculously low bar to clear. Indeed, it’s early days – Labour may still trip on it.
I largely agree with that assessment: all things considered, including the lay of the political landscape overall, Chalmers seems to have stretched “politics as the art of the possible” as close to its limits as can be expected from a mainstream party in government. In other words: he has stayed well within the Overton window
Trouble is, whilst politically astute, as far as competently addressing the problems of the real world, it still amounts to a case of “too little too late” – meaning that real world problems will continue to pile up more quickly than Canberra can manage them.
And this, in some ways, has been playing out since the late 60s/early 70s.
Arnd,thanks for articulating what some of us think.
A new, but not surprising, low for the bald fuckwit(less) Der Dook of Dunce:
https://www.smh.com.au/politics/federal/desperate-dutton-s-attack-lines-are-dynamite-20230510-p5d7g1.html
Sinn Fein’s idea of sending our defence personnel to link up with training missions of the Chinese defence forces is not outrageous. Chatgpt did not pick up instances of involvement by China in military training with Australian forces. However, I pick up these examples from quick search of an article from Security Challenges which would be available through most universities and libraries from 2011:
A former member of the Australian defence forces was in my MBA class at University and claimed that the PLA participated in Joint Training Exercises in the NT in the federal LNP term of government. These training exercises were post-2013.
His/her take on the event was that the PLA had good electronic equipment but were too reliant on orders from their officers. Our forces were actually more flexible in their responses to the training schedules and that gave them an advantage in the training.
From the Reference List Security Challenges (2011). 7(3):51-69
PLA Daily, ‘Guo Boxiong’s Visit Will Enhance China’s Military Ties with Australia, New Zealand and Indonesia’, Ministry of National Defense of The People’s Republic of China, 11 May 2010,http://eng.mod.gov.cn/Opinion/2010-05/11/content_4155141.htm [Accessed 18 December 2010].
Royal Australian Navy, ‘Royal Australian Navy Joins China in Live-fire Exercise’, Royal Australian Navy, 24 September 2010,<http://www.navy.gov.au/Royal_Australian_Navy_joins_ China_in_live_fire_exercise> [Accessed 6 January 2011].
A little citizen’s journalism report for our readers about a minor aspect of our relations with China.
The Guangzhou and Central China Swimming Teams used to train in Brisbane at a university pool during the Chinese winter for a couple of weeks before COVID-19 times.
As they swam in modest lycra shorts, I noticed that the coaches took things much more seriously than standard practice with Aussie teams.
Our education system here is also more relaxed. Chinese students here learn a lot more than their subject areas..
Our soft power may have extended into Chinese promotional videos like this touching video from Tsinghua University in which lecturers join the student chorus: https://www.youtube.com/watch?v=WNPKRjNEZ5E&list=RDWNPKRjNEZ5E&start_radio=1
funny but there are still some idiots who are hooked on the poms or the kiwis. Arnd our party is LabOr and your ‘too late’ is coalition’s years of neglect. An era to which your planet will regress..
The shit in Aust is the libs 1949-72 years of running jumping standing still the 3 years of running with sweat and tears and jumping for joy. How, in less than a year, does the memory of the rabbott and scummo no longer send shivers down our spine. Who the ffff allows denigration of Albo et al? What the ffff allows the loonies to be an ABC major opinion? ps labor voters conned by the loonie lies of climate change floods, with preferences from palmer and hansen took seats from labor. pps Albo take a chance that the labor who ticked the loonies in qld will return and go for a DD
“ the current fetish for minor political parties should not detract from the prize of majority government at least in the House of Representative.”
Fetish? The current Labour government is indeed a minor political party supported by barely a third of the primary vote yet it has undemocratically won the prize of majority government in the House of Representatives through a flawed preferential electoral system that obliges voters to endorse other candidates even if it is against their will or else have their ballot invalidated. If there was an extra box to tick on the ballot paper that said ‘no other preference’ the democratic will of the people, or fetish if you prefer, would be better served.
The Liberal party is an even minor political party and relies on its coalition with the extremely minor Nationals party to win government, again through Australia’s flawed electoral system that is so blatantly undemocratic when you compare the number of representatives each party wins with the true democratic will of the people which is only revealed by the primary vote. If we did have that ‘no other preference’ box to tick, it would serve to indicate the true level of democratic endorsement for candidates and hopefully encourage them to strive harder to win that endorsement rather than take it for granted with the ‘who else are they going to vote for’ attitude.
We should be entitled to equal proportional representation in parliament and not be obliged to endorse and be represented in the parliament by a party that does not really represent our interests. They may be better than the alternative, but that is no consolation when they too act against our interests. No voice in parliament is a better alternative to a voice that doesn’t speak for us but against us.
I tried to listen to Duttons’ Budget reply speech but when he said :
We (the Liberal party) bequeathed (to the ALP) interest rates at historic lows.
I started to gag !
for me the budget is a tiny step in the right direction. $2.85 a day increase is fucking mean though. I understand they cant fix everything, but jesus christ, $2.85?
I just heard the budget reply.
Your not sure if unemployed should get an extra $2.85 a day? What utter bastardry they offer.
Yet, their idea of letting unemployed earn more before the benefit cuts off is a brilliant idea. and my comment has to be the same as labor’s, ” where the fuck were you for ten years?”
So here we are, stuck between two levels of shit. One smells better but which one?