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Trending Issues: The Plan to Get Re-Elected Over a Budget for the Future

Beyond the Short-Term Cheers of Budget Night

In the wake of the mining and housing boom, Treasurer Josh Frydenberg faces the headwinds in the global economy with a cynical plan to get re-elected under the wand of the unsustainable appeal of a consumer revolution for middle-income families in the vast 30 per cent tax range extending to incomes of $200,000.

The structural problems of Australian investment as foreshadowed in the latest edition of RBA charts have been overlooked in an election grabbing agenda.

Thanks to the resistance of Labor and most of the cross-bench members of the Senate, company tax benefits for the big end of town from 2018 have been scrapped permanently. Treasury is awash with revenue for election hand-outs.

Labor is also able to take advantage of this windfall to consider addressing the waiting list of 2 years for Home Care Packages for elderly and disabled people which will have no growth in the post-election period. The budget was also silent on appalling rates for long-term unemployed people on Newstart Allowances.

Labor has promised to match the federal LNP initiatives with an additional tax break to lower-income workers in the 19 per cent taxable income range between at least $30-$40,000. The costs of these concessions will be offset by a continuation of the progressive tax surcharge on incomes above $200,000.  Labor’s largesse could be extended by a Medicare surcharge for the highest income levels.

Soon after the Budget speech, Queensland Deputy Premier and Treasurer reminded local constituents of the infrastructure shortfalls in public transport, health infrastructure, indigenous housing and TAFE projects. There is no funding for the Cross-River Rail Project in Brisbane (Blue Mountains Gazette-2 April 2019):

Queenslanders have been shunted in the federal government’s spending priorities for a second year running, state Treasurer Jackie Trad says.

Treasurer Josh Frydenberg’s first budget revealed the Morrison government would shell out $4 billion on new infrastructure across Queensland, though only a quarter of that will be spent over the forward estimates.

But Ms Trad decried the budget as a bid to shore up support for the Coalition ahead of an imminent election, and said it ignores critical infrastructure needs in a growing state.

“There’s only one way to put it – Queensland is missing out,” she said.

“What’s clear from this budget is that Scott Morrison only has a plan to try and get re-elected not a plan for the future of Queensland.”

She says the money that has been pledged is problematic because it won’t be spent right away.

“Across the state, they say they’re spending $2.6 billion more on infrastructure but a massive $2.3 billion of that is more than four years down the track,” she said.

Are Long-Term Investment Multipliers Sustainable for both Private and Public Sectors?

Under-spending on the National Disability Scheme (NDIS) during 2018-19 has also added to the short-term revenue windfall for the Australian Treasury which minimizes the current deficit to $4.2 billion and magnifies the foreshadowed surplus of $7.1 billion. NDIS administrative economies contributed $1.6 billion to improve the fiscal data.

The federal LNP government has also massaged its capital expenditure spending to coincide with the three-year election cycle. Capital works spending has been eased back substantially in 2019-2020 and will peak again in 2022-23 (Budget Paper 5:45):

While Josh Frydenberg boasts on the ideological value of such trends, there are warning signs in the RBA Charts for Capital Investment which is predominantly from the private sector:

Blind-Spots Relating to the Social Consequences of the Cyber Revolution

The budget is quite silent on the long-term effects of the Cyber Revolution which is wiping out employment growth across the skill range from the fast food sector to retailing and selected professional categories.

The writing on the wall about technological change is quite familiar to the World Economic Forum with its headquarters in far-off Switzerland and attracts Australian observers from both business and public sectors World Economic Forum Online in Cologny-Geneva:

The Fourth Industrial Revolution represents a fundamental change in the way we live, work and relate to one another. It is a new chapter in human development, enabled by extraordinary technology advances commensurate with those of the first, second and third industrial revolutions. These advances are merging the physical, digital and biological worlds in ways that create both huge promise and potential peril.

The speed, breadth and depth of this revolution is forcing us to rethink how countries develop, how organisations create value and even what it means to be human. The Fourth Industrial Revolution is about more than just technology-driven change; it is an opportunity to help everyone, including leaders, policy-makers and people from all income groups and nations, to harness converging technologies in order to create an inclusive, human-centred future. The real opportunity is to look beyond technology and find ways to give the greatest number of people the ability to positively impact their families, organisations and communities.

Opinion at the neoliberal oriented World Economic Forum has moved on from the ideological tone of Josh Frydenberg’s continued faith in old style capitalism with its emphasis on environmentally unsustainable motorways to middle-income suburbs that are being cleared from bushlands at the expense of our treasured flora and fauna.

The world has changed since the Menzies Era but the federal LNP is stuck in the rhetoric of The Forgotten People which are still available in text and sound from the Menzies Virtual Museum.

Like these historic treasurers, the current federal budget is hardly a spirited vision for an Australian future as a vibrant part of the Indo-Pacific Basin. Cutting back on developmental assistance to the region is indeed one of our worst blind-spots (Parliament of Australia and DFAT):

The cynical priorities in the current federal budget makes the forthcoming election more competitive for the LNP in an electorate where concern about Australia’s real future may be less significant than the consumer clout of middle-income families in the motorway suburbs of our sprawling metropolitan areas.

A lot is riding on Labor’s Address in Reply as Prime Minister Morrison anticipates a reduction in his seat losses to remain in office as a minority government supported by a few compliant federal centre-right independent members as summed up in the lead finger-counting picture from the ABC’s Conservation Programme.

Denis Bright is a member of the Media, Entertainment and Arts Alliance (MEAA). Denis has qualifications in journalism, public policy and international relations. He is committed to citizens’ journalism by promoting discussion of topical issues from a critical structuralist perspective. Readers are encouraged to continue the discussions in this current series of Trending Issues for Australians in this election year.

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18 comments

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  1. Kronomex

    They have to run with the budget as their base for trying to win the election because that is basically all they have to work with, apart from the usual lies and scare campaigns, which will be ramped up to near screaming panic level almost immediately after the oppostion budget reply tomorrow night.

  2. whatever

    Always this crazy, American-style obsession with Tax.
    Most people don’t have this anal retentive fear-and-loathing about paying Tax.
    What they hate is Wage Theft and no Penalty Rates.

  3. Alan Nosworthy

    L.N.P. fan club Adani are already airing ads in primetime during regional Queensland channel 7 local news about how the state LABOR government is hindering a workers bonanza with mud crabs in every pot and wealth for all.
    Scummo can expect a little help from his friends.

  4. Lambert Simpleton

    whatever, skip over to, “Conservative’s Budget” and get the real magnitude of some of the imbecility.

  5. Aortic

    If you have a go you’ll get a go, seems to be one of the repetitive pillars of the economic message from the PM. What an inane vacuous piece of chicanery. I would dearly love to sit him down, not next to me please, and explain exactly what this diatribe means. The more he raises his voice, which is his fall back position always if he is asked pertinent questions he has no idea how to answer, the more he portrays himself as a man way out of his depth surrounded by colleagues who are way out of theirs.

  6. Mia

    More long-term planning is needed in Australia as implied in Denis’ article. There are head-winds as the Treasurer tells us but the living standards of a smaller economy like the Australian economy can only protect itself by more planning at home and engagement with Asia abroad.

  7. Pat

    The Morrison Government needs to encourage more sustainable investment in order to protect the environment and the fabric of society.

  8. helvityni

    Go to some of those progressive Scandinavian countries and witness what can be achieved by paying high taxes….

  9. rubio@coast

    A worthwhile article that restates the importance of the investment multiplier in a more planned Australian economy that has space for fresh initiatives in sustainable energy, essential infrastructure and community development.

    Will Labor catch up in time to a new approach to the management of the market before the LNP? Josh Frydenberg is a slow learner and his budget is stuck in another era as defined by Menzies and Thatcher

    This alternative should bring my local electorate of Robertson back to Labor next month as it is held by the LNP by a slender margin.

  10. Alcibiades

    Pat,
    They did. There were a whole three sentences on ‘climate change’, the phrase even being mentioned not once but twice, in the voluminous budget papers. Further cuts to the renewable energy agency, ~$40Bn in subsidies for large polluters, resurrecting with yet another new coat of paint Abbotts reviled, corrupt & worthless $2Bn ‘Direct Action’. Oh yes, and some modest environmental gardening programs, um, reality shows, or some such.

    They’ve turned a new leaf, seen the light, are now Climate Change Beliebers(sic). They have told us so themselves, post knifing Turnbull & the laughably 4th rate NEG, have they not ?

    helvityni,
    Oh indeed. Yet the multinational corporations don’t pack up and leave, hm ?
    Along with the wealth earned from exporting their natural resources for decent revenue, and superannuation schemes, soundly invested in such as Norways sovereign wealth funds. Norways resources sector fund alone has over US$1 trillion in assets, including 1.3% of global stocks and shares, making it the world’s largest sovereign wealth fund.

    Yet the Multinational corporations are still there, still investing. How very odd. Scotty, Josh, please explain, what’s going on ?

  11. Bill

    Time for a name change in Australian politics!

  12. Leila

    Role on the Federal Election, is all I can say. People have stopped listening and made up their mind ages ago, . This current Government cannot be trusted and we place our faith in the next Labour Government to govern for all Australians.

  13. Stella

    Denis, thank you for your interesting commentary on the budget. We definitely need more invested in public infrastructure, regional economies and social services.

  14. Kronomex

    I see the Rupert rags have already started with the scare campaigns –

    https://www.news.com.au/finance/economy/australian-economy/property-faces-a-day-of-reckoning-if-labor-scraps-negative-gearing-hurting-every-australian/news-story/e57745d2fa4dd172abe74e42bbd6197b

    The diarrhea spewing from this article is so stench laden it’s a wonder my computer hasn’t melted down.

    Jeez, Scummo couldn’t have looked anymore like a dodgy, very dodgy, 1970’s style used car salesman if he had tried harder.

    https://www.theguardian.com/australia-news/2019/apr/04/morrisons-back-in-black-surplus-ad-seems-to-suffer-a-deficit-of-originality

    The smarmy smug look immediately raises trust issues. They should have shown his hands as well; a blood covered dagger, one marked Abbott and the other Turnbull, in each hand to complete the image of a political scumbag and backstabber. I think Brutus would have been afraid of Scummo if he had been in on the plot to assassinate Caesar.

  15. rubio@coast

    But the mainstream fears are being challenged by Bill Shorten’s delivery skills and his willingness to build on the positive changes since the 2018 budget which condemned the value of higher real wages and tax relief for lower income workers doing it tough in the mortgage and rental markets. In our electorate of Robertson, million dollar houses and rents approaching $3,000 a month are quite common. Neglect of Newstart victims in the current budget was appalling to support long-term unemployed from all age groups,

  16. Kronomex

    Well, the first “Vote for us because we’re just so damned good and wonderful.” crap from the LNP has appeared in the letter box. Mind you it disappeared into the rubbish bin as I walked past it. Gosh, you would think there was an election looming or something. That something being that Scummo hasn’t announced it yet. Ah well, nothing like getting in ahead of the other parties to get try and get your shit, frighteners, and scare tactics out there early.

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