MUNGO MacCALLUM. From catastrophic to merely awful.

Feb 5, 2019

Coalition in new year bounce, screamed The Australian ecstatically. Well, not all that much of a bounce – the latest Newspoll showed that the government’s position had improved from catastrophic to merely awful. 

But that was enough for Scott Morrison, who bounced out of the silly season rebounding, cannoning, ricocheting and caroming all over the place. And, like all good bouncers, his immediate instinct was to beat the crap out of those regarded as undesirable, meaning, of course, Bill Shorten. 

Shorten would drag the economy backwards, he warned; recession could not be ruled out. There were head winds and storm clouds ahead in the United States, in China, in Europe – just about everywhere except in the utopian land of Oz, in which he and his team (or what is left of it) will keep the good times rolling for all eternity. 

And just to make the point he splashed lot of money around Queensland and offered more handouts for small business, a strategy which has not impressed voters in the past. But as every good marketeer knows, the point of advertising is to persuade people to pay for stuff they neither need nor want, and if persuasion does not work the first time, just keep hammering the message until the victims submit. 

But wait, there’s more – 1.25 million new jobs in the next five years. It sounds like a big number but in fact it will only hold the line, keeping unemployment at its current level. And despite the initial ballyhoo, even if they eventuate not all those jobs will be full time, exacerbating the problem of underemployment and doing nothing at all for wage growth. 

And then the set of steak knives – a promise (!?) to get rid of the national debt in ten years. This, of course, is an aspiration rather than a commitment – and given that the debt level has grown considerably during the five years since Tony Abbott warned of the debt and deficit emergency under Labor, a fairly unconvincing one. 

But the trouble with Morrison’s big spiel is the inherent contradiction at its very foundation. If Morrison is correct – and for once, the vast majority of experts are on his side – there are indeed serious risks emerging in the international economy. 

Admittedly there is not much Australia can do about it; the big players, Donald Trump, Xi Jinping, Angela Merkel, Emmanuel Macron and even Theresa May might have some influence over events, but Morrison has practically none. 

His role will have to be reactive, and the obvious – the only rational – approach would be the precautionary one. Australia is looking towards a small and probably temporary budget surplus with very little protection if the shit hits the fan. So as the respected Deloittte boss, Chris Richardson, pointed out last week, 

Morrison has a straightforward choice. He can squirrel away the resources he has – principally the windfall revenue from increased commodity prices, which are unlikely to last all that long, or he can spend it in an effort to buy himself an election. In stark terms, he can look after the national interest, or pursue his own. 

And no prizes for guessing which ScoMo will choose: the pork barrels are already being unpacked and there is no sign that the largesse will be limited. The reverse in fact; as things stand (or fall) 2019 will be the biggest spend since 2008, when Kevin Rudd was trying to hold back the Global Financial Crisis,  a real emergency when there was a real threat to real jobs and a real risk of a real recession. 

If Morrison’s current scare campaign actually came to fruition, there would be very little ammunition left for Treasury to resist. But don’t you worry about that; long term policy – or indeed any serious policy – can wait. What matters is the immediate future, the next three and a half months and on this schedule, Morrison is quite unequivocal: there is only one imperative, and that is to destroy Bill Shorten. 

Or, as Morrison prefers to put it, “it will be  very honest campaign, and I’m not going to shy away from that. I’m not going to sugar-coat the risk of Bill Shorten and Labor to the economy, but I’m not going to overclaim it. I’m going to talk to people pretty bluntly about what is coming.” 

And right on cue to the Minister for Energy (or at least fossil fuels) Angus Taylor explained that Labor’s target of 45 per cent renewal energy would shut down the cities of Gladstone and Mackay. A double reprise of the Whyalla wipeout – two crazy scare campaigns for the price of one. Well, at least there was no sugar-coating. 

But the big scares – the sledgehammers, the wrecking balls – will come from what Morrison and his excitable Treasurer Josh Frydenberg insist in calling Labor’s $200 billion tax grab, which will impoverish homeowners, renters, retirees, pensioners – you name them, Labor will impoverish them. 

But apart from the obvious overclaiming, Morrison must know that the majority of the proposed changes would not be new taxes, but the removal of concessions granted overwhelmingly to the rich – what others might describe as perks, lurks, scams and rorts. Morrison presents them as entitlements, almost God-given rights. 

And it need hardly be added that they come at a hefty cost to revenue, and thus add significantly to the dangers if and when the storm clouds and head winds start looming. Shorten will spend the extra revenue predominantly on schools and hospitals, so the immediate fiscal outcome will not alter. 

But the priorities will, and this is what the election will really be about. If neither side is committed to economic rectitude, the argument becomes which promises are the more desirable. Morrison insists that the coalition’s record of economic management is superior and that he will prevail. 

But every day the evidence gets thinner. The polls may not be the only thing that is bouncing. Morrisn’s and Frydenbergs’s cheques are looking a bit rubbery too. 

Share and Enjoy !

Scroll Up

Receive articles straight to your Inbox

How often?

Thank you for subscribing!