Chalmer's Budget Blitz
Updated: Oct 25, 2022
Most find it hard to be enthusiastic about Budget night, though if you were present in the halcyon days it was like lobbyists' Christmas. Lobbyists of the union persuasion might be secretly happy, but the tune ringing in my mind is a song the anniversary of which we marked just pre-budget.
Sweet's Ballroom Blitz includes this stanza:
it was electric, so frightfully hectic And the band started leaving 'Cause they all stopped breathing
And the (Coalition) man in the back said everyone attack, and it has turned into a Budget Blitz.
Energy prices, electric and frightfully hectic, will rise 50 per cent in two years on the budget data. It is easy to blame this on 'global uncertainty' and a certain Russian tyrant, but as National Party leader David Littleproud told Flow this week, the massive rewiring of the energy grid for renewable energy - poles and wires criss-crossing regional Australia - will be a major cost component:
Labor campaigned on reducing power prices by $275. You can't get that math more wrong and its worrying when the greenhorn Treasurer is handling unprecedented debt - as the Budget Papers read:
"Gross debt is close to one trillion dollars and is at the highest level as a share of GDP in over 70 years."
That's not Alicia Silverstone Clueless gross - but then again, you ought to think of it that way. GDP is Gross Domestic Product, in short, the size of our national economy. It's a bit like taking on your biggest ever mortgage despite your income not changing. Unlike you, the government can print money and would never be allowed by global lenders to go broke. So the need for 'fiscal responsibility' (as it is called) is far diminished for you and I, the taxpayer - although treasurer Jim Chalmers is all 'as if'!. He won't stump up personally for that trillion dollar debt much more than you or I will in income and other federal taxes.
Governments don't have money of their own, it is your money - and debt - mine and that of every current - and future (read: your kids, grandkids) - federal taxpayer. Too few care about this reality, and it is why governments get away with saying record debt is hunky-dory because Australia isn't as deep in the red as other countries.
Let me repeat that point unless you've forgotten already - government's don't have any money. Every spend and all that debt will be paid for by you, me or our businesses. Retiring politicians will head off well remunerated and shrug their shoulders thanking their lucky stars it's not their problem any more.
Treasurer Chalmers didn't want to spook the horses with a Reserve Bank of Australia yanking the handbrake, the only brake it has, on inflation. The wheels are spinning, the rubber smoke is rising and we're in a downhill race to a cost-of-living crunch. Early casualties will be those that over-extended themselves on mortgages, but the level of Centrelink support for those without wages hasn't moved fast enough to keep up with cost-of-living.
'Real Wages' won't increase - that's not the alter ego of fake wages, it's a reference to what you earn vs what it costs to buy stuff. Cost of living, the loose buzz phrase for the Bureau of Statistics' Consumer Price Index (remember 'CPI'?) for that stereotypical 'basked of goods' costs a heck of a lot more. Just ask your lettuce, but it's all good if you have a Tesla - they're getting half a billion dollars spent on getting an electric vehicle, and a regional charging station network. Great for tourism so those wealthy inner-city types can come enjoy your region, not much good if they get bogged in a bitumen sinkhole. In fact, if your family makes choices Labor approves of - like getting a Prius or putting your kids in childcare and heading into the job market - you're in good shape. Regional Australia has what's described as a 'childcare desert' so you get the picture that it's people in the cities are the big winners in Tuesday's budget.
Regional Victorian Nationals MP, member for Mallee Anne Webster, sums it up succinctly:
Families with newborns are big winners in this budget, with the government using financial incentives to encourage both parents - the 'birth parent' and 'non-birth parent' in this contorted newspeak we now live in, not mum and dad - to take the leave together to share the newborn burden.
The complaints about the lack of help for real wages from commentators is valid, whatever pay increase workers have secured doesn't keep up with the cost of goods and services to get by. Had Chalmers thrown cash around, that would simply have gone out there into the supermarkets, pubs and God-knows-where-else and pushed inflation higher.
No doubt the Budget was cast less than a week before the RBA meets in the hope it would again slow the cash rate increases to 25 basis points, if not indicate it was going to stop hiking rates altogether. After all, rate rises not only dampen new business activity, they push up mortgage costs - not to mention what it costs taxpayers to service that ew gross near-trillion in debt.
Also egregious in this budget is the pledging of five-year spending. Like Tia Carrere's cover for Ballroom Blitz in Wayne's World, we've heard this song before. Labor bemoaned 'cuts to education' pledged over 10 years by the Rudd-Gillard-Rudd governments, yet they had never put the money in the budget for the 4th to 10th years. It's pure salesmanship and needs to be called out as such, so pledges of 5-year spends in fixing black spots and improving regional internet coverage is in fact far less than what the budget claims.
Waiting in the wings, muted because it is a Labor not Coalition government in office, are the unions. They'd be protesting in the streets on the lack of handouts or wage relief if Josh Frydenberg had delivered this budget. They're muted because they are waiting for their big payoff for Labor returning to office after 9 years - industrial relations reform. That's a whole other playlist, suffice it to say long-term power is the trade-off for unions in their silent reaction to this budget.
Here at Flow, our focus as a regional commercial broadcaster is on the hot topics from our extensive May election coverage - mobile phone coverage, internet reliability, road and rail infrastructure, biosecurity. Crumbling roads smashed by flooding will need more than a bit of bitumen in the holes - roads need to be elevated, flood-proofed or backed up by rail, like Murray Basin Rail, to get that heavy freight from expected record harvests out of the trucks smashing roads, and onto reliable rail infrastructure.
For now, the immediate reactions to watch on this budget will be the stock market and RBA next Tuesday, followed by data on consumer spending.
Labor might have wanted to avoid spooking the interest rate horses with a 'cautious' budget, but the inflation horse has already bolted.