Remember much about the last budget? What about the one before that? And remember, too, if you’re reading this, you’re atypical of the electorate, which by and large pays little attention to budgets despite the obsession of the governing class with them.
That’s partly because budgets are political exercises and have little to do with what they purport to be — economic and fiscal plans for the next one to four years. They tend to disappear like yesterday’s media conference. It’s why there are very rarely “budget bounces” for governments. Wondering about whether there’ll be a “budget bounce” is a lot like looking for bounce from the prime minister’s last press conference.
Sometimes budgets do take hold with the electorate, usually in a bad way. A classic case was 2014: Tony Abbott and Joe Hockey offered what, in macroeconomic terms, was a sensible stimulatory budget, but in their political wisdom painted it as an austerity budget, and Labor gleefully helped them. Successive prime ministers and treasurers since haven’t repeated the mistake.
What budgets very rarely do is address long-term problems. They are what they say on the tin — a budget for 2014-15, for 2020-21, for 2022-23. And the ambition rarely extends even the full length of the financial year in question. This year’s is particularly tightly focused, and doesn’t extend beyond May.
The biggest long-term problem we have is aged care. Some might say it’s climate change, but we know what to do about climate change — even if our corrupted governing class refuses to do it. What exactly we do about aged care is a more complex policy problem.
We have a very tight labour market and an ageing population. We don’t have enough aged care workers and it’s not clear where the extra tens of thousands we’re going to need between now and 2050 — which, I regret to inform you, is now closer to us than Keating’s 1993 election win — are going to come from.
Like climate change, aged care is also a moral challenge. How we treat our seniors, at the most vulnerable time in their adult lives, says a great deal about who we are as a society.
And what it’s saying at the moment is, to be blunt, pretty fucking awful.
Despite the aged care workforce taskforce and its strategy, years of work and a royal commission, we’re no closer to working out how to address the long-term challenge of an aged care workforce. And we’re no closer to taking what is universally agreed — outside the Coalition and Labor leadership — is the best first step to addressing it: materially increasing aged care workers’ remuneration.
The government has refused to commit to increased funding to enable aged care providers to lift wages, and Labor has refused to do so too. Among the carefully prepared budget drops is $50 million for aged care training, but that’s only one tiny piece of the other issue of the aged care workforce than wages: how to professionalise the workforce.
But if we won’t get any answers on aged care, we’re not going to get any on decarbonisation, despite clear evidence that the quicker we abandon fossil fuels, the quicker we can strengthen our strategic position against aggressors like Russia.
In fact, this budget will represent a stepping up of the Coalition’s embrace of fossil fuels, with increased revenues from coal and gas companies (from what little tax gas companies like Woodside, Santos and Origin pay for our resources) funding the government’s reelection effort, while the government pays out more taxpayer funds to its fossil fuel donors under the pretext of a “gas-led recovery” or “helping Ukraine”.
Other strategic and long-term issues are also likely to remain unanswered. We have no plan to replace the near-obsolete Collins-class submarine fleet, except a “study” of apparently highly variable timing of nuclear boats, which will probably cost way over $100 billion.
There is funding for a submarine base floating around for some lucky electorate that likes the taste of iodine pills, but Australia has entered the most challenging strategic environment since the end of the Cold War with a looming major gap in its defences, all because Prime Minister Scott Morrison needed a big defence announcement to distract from his political woes.
We are likely to get answers on another long-term problem: housing affordability. Except they’ll be the wrong answers, aimed at — via both subsidies and guarantees — pumping more money into the housing market in a desperate effort to make up for the imbalance in the tax system between young and lower-income people and wealthier, political more influential investors who are generously subsidised by taxpayers, in a race that ends up benefiting only home owners who enjoy higher values, keeping the vicious circle going another year.
And there’s one slightly more obscure, but equally important, question that has a greater chance of being answered. The relevant location is Table 11.1 of Budget Paper 1, which shows the proportion of government spending to GDP. Under Morrison and Treasurer Josh Frydenberg, the size of government has ratcheted up far beyond the level of any previous government since the war. Putting aside the pandemic spike to nearly a third of GDP in 2020, the size of government is now 26-27% of GDP, up from 24-25% when Labor was in government.
Will the Coalition fulfil its natural role as the big spenders of Australian politics and keep government permanently larger? Or will it take any serious steps to get spending down to the levels Labor lived with under Wayne Swan? Don’t bet on the latter.
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