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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