Treasurer Jim Chalmers’ updated 2022-23 budget offers a mixed bag of a poorer economy for working Australians but stronger revenue for the government, bringing deficits down significantly before an increase in the overall size of government solidifies a long-term structural deficit.
Chalmers unveiled significantly lower deficits over the next two years — a $37 billion deficit, down from $78 billion forecast in the April budget, and $44 billion in 2023-24, down from a forecast $56.5 billion, off the back of $142 billion in extra revenue over the forward estimates. Chalmers says this extra revenue has nearly all been banked rather than spent.
But the forecast deficits for 2024 and 2025 are both higher — by $4-6 billion — than earlier forecasts as spending continues to grow, back up to 27% of GDP.
The economy and households will struggle. Growth has been downgraded across the forward estimates, and will be just 1.5% in 2023-24. There will be an increase in unemployment back to 4.5%; inflation over the year will hit 5.75% in 2022-23 (and peak higher later this year).
Labor evidently has high hopes for its industrial relations changes — it thinks wages will grow even more strongly than under the Coalition, forecasting growth of 3.75% over the next two years. But even with such Panglossian optimism, households are set to go backwards in real terms.
As promised, the government has reprofiled infrastructure spending, saving $4.7 billion over the forward estimates. $3.5 billion has been cut in public service consultants and travel, and National Party pork-barrelling worth $3 billion has also been ditched.
But Chalmers and Finance Minister Katy Gallagher promised that spending restraint would continue to characterise the government and that “hard decisions” lie ahead — as they must for a country that has permanently increased the size of government but not bothered to yet work out how to pay for it.
Keane gets this wrong every time he reaches for the phrase. Dr. Pangloss was not convinced everything is simply wonderful. Pangloss insists this world is the best it can be, no matter how bad it is. As Candide and his good friend Pangloss meet with endless terrible disasters and horrible suffering, Pangloss assures Candide that it is all for the best. Voltaire was satirising theodicy, not optimism, the belief of Leibnitz (and others, such as Alexander Pope) that “a perfect God could only have created the best possible world. Hence, the human perception that events like pandemics, earthquakes, massacres and tsunamis are bad must be mistaken.” If Chalmers thinks conditions are going to improve his optimism is not Panglossian. On the contrary, Dr. Pangloss would insist the current state of the economy is as good as it gets, and whatever happens next, even if it goes downhill very fast from here and we all end up ruined, starving and homeless, it’s fine because it is still as good as it could possibly be.
It’s a common error of half read hacks to confuse Dr Pangloss, the realist with 12yr old Pollyanna, the flibbertigibbet.
I’d love to join in this circle jerk, but I missed out on a classical education; obviously my fault for being born in the wrong time and place
There are many portable, solar powered, random access, data storage units available in any op-shop for 10-50cents.
Well worth finding and utilising, as this autodidact discovered long after leaving school at 15.
Labor has just committed to a record migrant intake and massively expanded work rights for “students”.
May as well be WorkChoices 3.0.
Unemployment is headed upwards and wages will be crushed.
To say nothing of catastrophic worsening of the housing crisis roughly a Canberra’s worth of extra people every couple of years will produce.
“Vandalism” is about the only word for it, short of “evil”.
Not to mention having “..struck (sic!) an agreement with Investors & the building industry to build 1M homes after 2024…” in five years.
Note the primacy of those well known & beloved altruists, the Blessed Investors.
In the 5 years to 2022, there were 985K houses built – what would that ‘normal’ figure have been without the covid shutdowns?
One can’t even say ”Thanks for nothing” as it’s less than ‘normal’ – pretty much what could be expected of Charmless, who makes the desicated abacus Hewson look like a fun-lovin’ party animal.
Let’s not forget the allocation of M$186 in military assistance for a certain European country that could be better used to assist our own citizens. I would rather it be added to the additional M$500 for our Veterans.
Simple solution. Just make all the migrants bring their current accommodation with them.
The ‘deficit’ is a mythical hobgoblin that we could banish with a few keystrokes.
See my comment after Keane’s other piece ‘Labor embraces a world of bigger government’