Out of ideas and full of fiscal analgesics

Almost 39 years after Paul Keating said Australia was on the way to becoming a “Banana Republic” this year’s budget shows Australia has its sails set and is heading in that direction.

If the government were not so set on NetZero, it might even be said to be “full steam ahead”.

 Best thing about the budget is it had no genuine new ideas and was based on bribing electors with money the government doesn’t have in the hopes it will win the next election.

It could have been worse; they could have extended their wealth-destroying policies. Instead, they are merely maintaining their course.

It suggests the government has run through its radical agenda and is now in maintenance mode.

This government  has seen record immigration, highest inflation for 35 years, 7 quarters of negative per capita income growth, record housing unaffordability (owning and renting), stagnant productivity, highest government expenditure as a share of GDP outside COVID-19 ever, record mining receipts wasted on tiny surpluses, with major deficits and debt now projected for the foreseeable future.

These failures constitute the “cost of living crisis”. No new deep structural measures means the degradation will not accelerate, just gradually perpetuate.

Most of the budget measures are designed to convince voters either the crisis isn’t happening, or that the government cares about them.

Instead of fixing the problems the government is handing out fiscal analgesics.

There is a reason for that. They do not have an empirical approach to finances, they have an ideological one. Having delivered for their owners, the trade union movement and the Green hysterics, they cannot admit that what they have delivered is the root of the problem.

We now have a government whose only solution is to play Whac-A-Mole with costs. When they put living costs up, they give a trivial tax cut in the hopes you won’t blame them. When they incentivize too much unreliable energy they first subsidise existing power producers, like coal, to fill the holes this creates, and when that doesn’t stem the cost rises, they subsidise the domestic consumer and pretend the problem doesn’t exist.

Generally they leave the business customer to fend for themselves, except in the case of certain protected industries like aluminium, where the concessions they give to the industries to make up for the hike in costs is correctly seen by international competitors as non-tariff trade barriers.

While spending has continued their is no attempt to find genuine savings. A prime example of this is that the NDIS is projected to continue to rise at 8% per annum against growth in the economy of only 2.25% (including population growth). What is the cause of this? Are we expecting more disability? Will fraudsters find more ways to profit? Will legitimate businesses find more ways to profit?

A rational government would cap and means test benefits. That’s what a young Paul Keating would have done, and it was that approach that set Australia on a course which made us the 12th richest country in the world, equal to Russia, which has five and a half times as many people.

This government has no courage, and no honesty. Instead of cleaning-up their own mess they’re hoping someone else will do it, and if they’re lucky it won’t be until after the election after this, because they hope to win this election, and maintain themselves in power.