For a government that had an extra six months and practically unlimited funding to shape whatever budget it liked, last week’s effort looks increasingly disappointing, both politically and economically.
Remarkably, after a budget that lavished half a trillion dollars of deficit spending on the economy and handed out billions in tax cuts, the government ended the week on the defensive over its indifference to women.
Anthony Albanese, for most of this year hors de combat courtesy of the political demands of the pandemic, adeptly exploited that to unveil a major new childcare initiative that will effectively move childcare into the government-funded service column currently occupied by Medicare, NDIS and, partially, aged care and super.
It stood out not for the cost — at $6 billion, small beer in the post-COVID world of trillions — but because it suggested some vision of what the future economy should look like and why it should be different to the current one. Vision that was wholly lacking the previous Tuesday.
Other critiques have come from the right, rather than the left, complaining that the government had “wasted the crisis” and failed to push through whatever neoliberal fantasy the author most strongly advocates. But the essence of the criticism is the same: no vision.
Since then, some of the wheels have started falling off the budget business centrepieces, the colossal instant asset write-off designed to encourage, or at least bring forward, business investment, and wage subsidies to encourage business to add on workers.
The efficacy of the measures, which are fundamental to the government’s forecast of a business-led recovery, are being seriously challenged. Small business peak body head Peter Strong has raised doubts about the extent to which the wage subsidies will deliver more jobs. Michael Pascoe has pointed out a significant flaw in the investment strategy — the high hurdle rates for business investment, elevated by pandemic-related uncertainty.
And — in what would be declared a “debacle” and a “bungle” if it had occurred following a Labor budget — Josh Frydenberg has had to rush to consult with the Business Council (BCA) because the asset depreciation provision threshold as drafted is too low for the large businesses and multinationals that make up the BCA’s membership. If only other community groups could have Treasury on tap to redraft budget measures for them.
This is in a budget that the government had an extra six months to craft, giving it ample time to consult with business about what would deliver the most effective incentive to get much-needed investment flowing. When your budget strategy is a business-led recovery, there’s no excuse for not getting the business incentives right. If you’re not doing the vision thing, you should at least nail the practical stuff.
The dearth of vision was at least partly ideological. The government seems genuinely averse to supporting social housing, the universal choice for fiscal stimulus. It is deeply reluctant to commit to a permanent JobSeeker increase. The lack of women in its senior domestic political ranks may also explain the strange gap in its thinking on notionally “female” issues like childcare.
But is the lack of substance in the budget beyond tax cuts and business incentives also because this is, even by modern standards, a government of limited substance? Remember the government spent 2019 — as the economy lapsed into deep stagnation and business and the Reserve Bank pleaded for fiscal support — thrashing around for an agenda, having been surprised to discover it was still in office.
The prime minister himself is a man of modest accomplishment prior to politics. Josh Frydenberg’s background is primarily as a political staffer. A look across the ministry reveals few people anyone would accuse of visionary thinking; many Nationals ministers, including Deputy Prime Minister Michael McCormack, show little evidence of any thinking at all.
The only heavyweight in the government is Mathias Cormann, whose departure will leave a massive hole in terms of experience, political savvy and discipline. His replacement, Simon Birmingham, is a smart moderate who will have giant shoes to fill in both the Finance and Senate leadership portfolio.
That Morrison felt obliged to elevate Michaelia Cash to the deputy Senate leadership is another example of how thin the talent is in Liberal ranks. Nearly as thin as the substance of the budget.
I am at a loss to understand the widespread belief among commentators that Mathias Cormann is a talent. He is an ideologue of very limited vision and with his appalling failure to disclose his free trip from Helloworld shows either a lack of competence in reconciling his credit card, crookedness of the highest order or a bit of both. In any event I am glad he is going and hope dearly he doesn’t have the chance to impose his blinkered incapacities on the OECD. Good riddance to one of the worst Finance Ministers in Australia’s history and that is saying a lot when you look at those we have to choose from.
We need a global campaign to not seat Cormann at the OECD – it will truly screw with his head – but after what he has done to so many people on welfare he deserves to be globally sledged and exposed for the nasty little ideologue he truly is.
Send the OECD an email.
Agreed Afred, but, when you compare him to the rest in his party He is a GIANT, just don’t expect too much!!
Putting the OCD back into OECD .. and he can speak French !
And German. And Flemish. So, obviously, perfect for the job!
To speak more than three languages is very common in most countries other than Australia and will not carry much weight in the OECD
thank goodness do we want to be a complete laughing stock!!
Agreed. Perhaps the widespread admiration of Cormann arises mostly in comparison to the talentless incompetent freak show surrounding him in the Liberal party. Keane and others often refer to Cormann’s ‘discipline’ in interviews. I believe this is the modern way of saying Cormann is a double-plus good duck-speaker. Which he is. He repeats his talking points remorselessly and never gives an answer worth spit.
…Winston turned a little sideways in his chair to drink his mug of coffee. At the table on his left the man with the strident voice was still talking remorselessly away….He held some important post in the FICTION DEPARTMENT….It was just a noise, a quack-quack-quacking….Every word of it was pure orthodoxy, pure Ingsoc….Winston had a curious feeling that this was not a real human being but some kind of dummy. It was not the man’s brain that was speaking, it was his larynx. The stuff that was coming out of him consisted of words, but it was not speech in the true sense: it was noise uttered in unconsciousness, like the quacking of a duck.
Syme had fallen silent for a moment, and with the handle of his spoon was tracing patterns in the puddle of stew. The voice from the other table quacked rapidly on, easily audible in spite of the surrounding din.
“There is a word in Newspeak” said Syme, “I don’t know whether you know it: duckspeak, to quack like a duck. It is one of those interesting words that have two contradictory meanings. Applied to an opponent, it is abuse: applied to someone you agree with, it is praise.
George Orwell, 1984
Excellent SSR. Entirely appropriate quotation. Cormann’s discipline has been his ability to render pure ideology and not think for himself at all. I see now why people go into politics on the right, the bar for competency is so low. Cormann one of the better ones, no more needs to be said.
He’s all accent and no trousers.
Excellent stuff , SSR. And let us not forget the LNP cabinet’s “doublespeak” ie “labour market flexibility / reform” and “trickle down” etc
I would ask Malcolm Turnbull to comment on Cormann’s abilities
That might be fun – the hagiography, even from the usually robust Wong, is nauseating.
A pity that nothing Talcum sez or does is worth a pinch of the proverbial.
You are right, Bernard, to stress what a really hopeless response this budget is to our economic downturn. The answer to your puzzles, such as the refusal to invest in social housing is due, as Frydenberg is strangely proud to say, in the Coalition’s policy. This is the budget you put forward when you have no idea what to do. The budget is not Keynesian. It throws bundles of cash toward business and middle to high income earners but it leaves it up to business “animal spirits” to decide what to do. Business, in particular, can decide to save or invest. If it saves, its shareholders will get richer to the extent that a shrinking economy allows. But why should it invest? True, bundles of cash has been thrown at earners but they might save too. The downturn is largely due to a fall in business activity in areas that are not COVID safe. Throwing cash will not restart these areas until they are safer, as is the case everywhere except NSW and Victoria. What government needs to do is redirect the economy into areas that address social problems. Poorer people spend less on goods and services because rent swallows much of their income. Solution: have the government, which does not have to make a profit, spend a lot on social housing, which will drive down rents and house prices and provide accommodation to the homeless. The Coalition refuses. Why? To protect the income and wealth of its rentier and its house owning mates. The electricity market needs to be developed in a new green direction, with hydrogen and methane produced from the vast resources of solar energy we have. This will bring down electricity prices and protect future generations from global warming. The Coalition refuses to do this, not because it is not willing to throw cash around. Why? Because it wants to protect its mates in coal and natural gas extraction. What the country needs is a KEYNESIAN budget with government investment, which does not have to make a profit, expanding the economy in new, COVID safe directions and which solves important social problems. The Coalition deserves a big “F”.
A first class analysis, and without hyperbole or snark.
Nicely done.
Times 2
Times 3
Shallow budget by shallow people. This budget was indeed a wasted opportunity. The energy crisis is a case in point and this ties in the so called gas led recovery (surely the circular relationship between subsidies and party donations is corrupt, even obviously so?). This budget could have acknowledged the climate/energy crisis and provided accordingly. It could also have acknowledged that infinite growth in a finite world is delusional. That has been cruelly exposed by the pandemic and increasing impacts of climate change. We need a different model and growing our way out of this crisis does indeed demonstrate an astonishing lack of vision.
They’re not good for much, are they. Except for winning elections. And that’s all that really matters to them.
I would have thought that is the primary motivation of any politician: win elections.
Power without purpose, means that the polticians are really only there for themselves.
Scottie from marketing couldn’t agree more, now that he is living in Kirrabilli house and not having to show up to parliament.
In fact ruling by decree.
Did this shower ‘win’ in 2019 or was “Labor” so vapid, untrustworthy and vision free as to be unable to sell ice cream in a heatwave?
I said at the time that it was a good election to lose because of what was shaping up globally as the neolib B/S reached the event horizon.
Now C19 has changed everything and, like John the Baptist, is preparing the scene for its descendants.
The reference to john the baptist in this contex escapes me, Flowers; would you care to enlighten me?
John was a man outside the quotidian paradigm, living in the wilderness on locusts & honey – Isaiah 40:3; Mal. 3:1; Matt. 3:3 et al – who came back to the complacent, not to say effete, urbanoids to say “Time’s Up” and prepare the Way for massive change.
No idea of, and less interest in, the xtian/religious eschatology, I only used the metaphor to emphasise, to our Pharisees (hi BK, Schwab, Murphy etc) that their world is a dead parrot.
Wot? Still, using the word ‘effete’, and a Monty Python reference, does rescue your comment. And I’m all in favour of overturning the money lenders’ tables at the temples of greed.
Money changers. Slight difference
They sold the worshippers small sacrificial animals, doves esp, for the temple rituals, as well as ‘tokens’ to lay on the altar – similar to the silver/gold foil limbs, organs & emblems which are commonly left at sacred sites around the Mediterranean basin today.
The modern version is casino chips except that the ‘return’ on investment is slightly better than in a temple.
Yep, a very shallow talent pool indeed. Its why money has an undue influence. In a transactional democracy like Australia’s maybe that’s what many voters want, a chance to get in on it as well.
More of a puddle than a shallow pool.