By Denis Bright
Stan Grant’s Q&A forum with Treasurer Jim Chalmers offered a sound rearview perspective on reactions to the Special Budget. The studio audience acted as a virtual focus group to express concerns about the burdens being imposed on disadvantaged Australians to carry other Australians out of the current inflation spiral and the effects of the forthcoming global economic downturn.
Jim Chalmers enjoyed the whole Q&A feedback process. Generating a national conversation about the options for a way out of the neoliberal era was clearly his own agenda as Labor’s representative in Rankin with its electorate office in outer Brisbane’s southside suburb of Woodridge where Labor gained over 50 per cent of primary votes at the last election. As a politically sharp representative from Logan City, Jim Chalmers would be fully aware of the social divide in Labor’s outer suburban heartland and the detachment of many working people from mainstream politics through failure to enrol or even to vote at election time. This local sentiment was covered in my initial post-election article for The AIM Network on 1 June 2022.
Jim Chalmers is quite well aware of the tidal wave of neoliberal values in mainstream politics. While maintaining a misplaced nostalgia for the discredited neoliberal era in global politics, Opposition Leader Peter Dutton dared to offer some qualified support for budget initiatives in childcare subsidies, lower PBS co-payments, housing support for veterans, flood relief and measures to combat domestic violence in his Address in Reply speech on 27 October 2022.
In the short-term, the Special Budget offered a chance of fine tuning of the original 2022-23 budget with one third of the current financial year already history. In the seven months since the delivery of the first budget on 29 March 2022, improved commodity prices have done more to assist the budget processes than real policy decision-making. These improvements are unlikely to weather the storms of a forthcoming global recession and the return of inflationary pressures for the first time in thirty years. Within the major portfolios, the longer-term fine tuning processes had commenced to deliver election promises in social housing, childcare services and paid parental leave and the delivery of new energy commitments.
Despite some relief measures offered to battlers and First Nations’ Australians in the Special Budget, the Q&A audience clearly wanted more commitment to the wealth divide in housing costs, rising energy charges, increased unemployment, more environmental degradation and threats of global international conflicts. All these major issues were touched upon by the Q&A audience. Jim Chalmers empathized with these concerns and needs more feedback from grassroots Australia to proceed with a more progressive national conversation.
Concerns about the implementation of Stage 3 Tax Concessions commencing in 2024 were expressed by the studio audience. Full implementation of these tax changes will cost $254 billion according to estimates by Nick Evershed and Amy Remeikis in The Guardian (25 October 2022).
These follies include some aspects of Stage 3 Tax Concessions which will cost future budgets $254 billion over ten years. These expected and regressive changes include:
- The higher tax threshold will increase from $180,000 to $200,000
- The $120,001 – $180,000 tax bracket will cease
- Income between $45,001 and $200,000 will be taxed at 30%
As noted by Jim Chalmers, Labor tried to amend the tax concessions but did not have the numbers to change the Stage 3 Tax Package from Opposition. The alternative scenario of promising a reversal in the Stage 3 Package would have turned the federal election into a shrill campaign on taxation which might have been more favourable to the LNP.
There is a similar problem with the financial burdens imposed by the purchase of US nuclear submarines at a cost of at least $67 billion as estimated by the article in The Guardian. The electorate is clearly conditioned by mainstream news services to welcome this expenditure plus additional costs for the training of crews and the construction of safe shore installations.
Closer ties with the US military through structural updates at the Pine Gap Communications Base, rotation of troops through the Northern Territory and the transiting of nuclear capable bombers through the Tindal Base have not generated significant debate in the community. Polling by the Lowy Institute suggests that support for the US Global Alliance by the Albanese Government is in line with public opinion.
Just in case DFAT policy makers stoke up a spark of independence in their assessment of global strategic trends, the Albanese Government has inherited a long period of hiring retired US Officers and civilian defence analysts as strategic consultants according to investigative reporting by Craig Whitlock and Nate Jones of the Washington Post (18 October 2022):
Two retired U.S. admirals and three former U.S. Navy civilian leaders are playing critical but secretive roles as paid advisers to the government of Australia during its negotiations to acquire top-secret nuclear submarine technology from the United States and Britain.
The Americans are among a group of former U.S. Navy officials whom the Australian government has hired as high-dollar consultants to help transform its fleet of ships and submarines, receiving contracts worth as much as $800,000 a person, documents show.
All told, six retired U.S. admirals have worked for the Australian government since 2015, including one who served for two years as Australia’s deputy secretary of defense. In addition, a former U.S. secretary of the Navy has been a paid adviser to three successive Australian prime ministers.
A Washington Post investigation found that the former U.S. Navy officials have benefited financially from a tangle of overlapping interests in their work for a long-time ally of the United States. Some of the retired admirals have worked for the Australian government while simultaneously consulting for U.S. shipbuilders and the U.S. Navy, including on classified programs.
In far-off Washington the Federal Reserve has hiked interest rates by a further 0.75 per cent at its latest meeting. This will further strengthen the US dollar and invite catch up interest rate rises globally as the US economy slides into recession and possible political instability if Republicans make big gains in the mid-term elections on 8 November.
So Australian policy-makers are stuck with global economic and strategic problems which are not of our making. In the short-term, this instability has produced a temporary improvement in commodity export prices which have decreased the size of the budget deficit at least until 2023-24. IMF projections show that Australia will be better off than most other developed countries enough to avoid a recession here.
If Australia’s economic slowdown in 2023-24 is more severe than expected progressive Australians might finally mobilize to support a national conversation which questions the value of Stage 3 Tax Concessions and outrageous purchases from US and British military industrial complexes during a period of growing austerity.
With Germany’s SPD Coalition Government trailing in national opinion polls, Chancellor Scholz will try to restoke economic relations with China on a one day visit to Beijing. Phillip Olterman of The Guardian (3 November 2022) notes that this is the first visit by the leader of a representative government to China since the commencement of the COVID-19 pandemic.
Australian representatives might eventually take a similar diplomatic route. Improved commercial relations with China are not off limits to Jim Chalmers in his responses to questions from the Q&A audience. Chinese factories have assisted in containing costs to public hospitals for supplies of medical equipment, prosthetic devices and specific items such as orthopaedic shoes (Medical Device Network 14 October 2022).
Political changes in Australia are not yet coming in the Whitlamesque style because of the new government’s spending restraints as a protection against future inflationary spirals as well as cautions from our US allies about improved relations with China.
Regrettably, there is little sign of mobilization from across the broader Labor movement to strengthen the national conversation for a spark of greater independence in Australia’s economic and strategic policies to challenge the wisdom of an All the Way With the USA approaches to domestic and foreign policies.
Without this mobilization, progressive changes are dead in the murky waters of economic downturns and strategic manoeuvres. The real problems are not with Jim Chalmer’ s progressive mindset but with national political apathy in this post-election era. Old structures of power and influence are not really changed by a single election victory and require nurturing by a long-term progressive government that can engage confidently with welcome cross-bench opinions.
Denis Bright is a financial member of the Media, Entertainment and Arts Alliance (MEAA). Denis is committed to consensus-building in these difficult times. Your feedback by using the Reply button on The AIMN site is always most appreciated. It can liven up discussion. I appreciate your little intrusions with comments and from other insiders at The AIMN. Full names are not required when making comments. However, a valid email must be submitted if you decide to hit the Reply button.
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