MUNGO MACCALLUM. Government rakes in the tax.

Glory Hallelujah. Let joy be unconfined. The budget is back in balance.

Except that it isn’t – we’re still about $700 million short. But near enough is good enough – certainly good enough to let an ebullient Josh Frydenberg predict more or less credibly that in nine months time, the sacred surplus can finally be delivered.

And if it can’t – if the iron ore price really tanks, or the windfall  tax revenue is not sustained, then we can always top up the figures by short-changing welfare, just as we did last year. So let’s party – we’re (nearly) back in the black.

Our treasurer’s excitement is understandable, because in fact there is not all that much to celebrate. The  good numbers have, as usual, little to do with him, which is perhaps just as well.

Cheering over a surge in tax collection hardly fits comfortably with his government’s mantra of letting the punters keep as much as possible in their own pockets, especially when the rate of receipts far exceeds that of the despised previous Labor administrations.

And bragging about how the result was driven by record job creation sits uneasily with the reality that the extra jobs have only been keeping pace with increases in immigration – the unemployment rate has actually gone up a little, with predictions of worse to come, and underemployment is now the highest on record.

And the melancholy truth is that the real economy – the one that affects real people – is in deep doo doo. Wages remain moribund and even the national accounts have stalled almost to a crawl.  Growth, and more importantly productivity, are stuck in the quagmire and both customers and investors are deeply unconfident.

The prospects of recovery are becoming dimmer by the day, with the Reserve Bank apparently resigned to the idea that it will have to reduce interest rates yet again – perhaps twice more – in the probably vain hope that it can provide a stimulus that the government resolutely refuses to offer.

If this does not work, there is no plan B anywhere in sight. The only way out of this impasse appears to rest on a Damascene conversion by Frydenberg and his leader; that having declared mission accomplished with their budgetary obsession, they may lift their myopic gaze towards the real economic problems and do something about them.

But to do that would in itself be an admission of defeat – a confession that all the slogans, the rhetoric, the denials and the bluster have been at best inadequate and at worst wrong-headed. Such honesty would involve breaking the habit of a lifetime, but that would be too miraculous even for Scott Morrison.

And as if to emphasise the point, the OECD has again downgraded its predictions of Australia’s growth rate, as well as pointing out the inadequacy of our response to reducing carbon emissions. Preposterously, Frydenberg says this is an endorsement of the government’s persistent and futile policies of pushing doors clearly marked pull.

But not to worry – we’re back in balance. On the edge of a precipice, perhaps, but we’re hanging on. So let’s bop till we drop – off the cliff.

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6 Responses to MUNGO MACCALLUM. Government rakes in the tax.

  1. Charles Lowe says:

    This Government is indeed obsessed by the “need” to boast of at least one “genuine” surplus.

    Reason – that’s THE headline which (it believes) voters will remember and will thereby further endorse the Coalition’s otherwise fatuous claims to be “the best economic manager”.

    Goodness: one’s got to be unconditionally ruthless – completely utilitarian – in understanding this Govt’s behaviour. Few who contribute to this blog seem to be.

    For my part, I’m prepared to believe that Albo understands this Gov’t strategy. His job, therefore, is to build a sense of ‘credible ethic’. He would make a good start by instructing his Right Wing Treasury Spokesperson Jim Chalmers to stop his covert pontification and start conversing with us – we ordinary people – as to the fact that government budgets are neither like those of households nor businesses.

    If Chalmers can’t do that – Chris Bowen and Dr Andrew Leigh can.

    Indeed, the Shadow Cabinet’s principal job in the first instance is to educate the electorate, or at least those electorates which have been – and may remain – vulnerable to Coalition scare campaigns. Why does Central Qld come so quickly to mind?

    What I find particularly mystifying is why Labor can’t “do a Churchill”. To assure these particularly vulnerable voters that only Labor will enable them to effectively reskill (despite some temporary pain of adjustment). And that such reskilling is their single best basis of maintaining and extending their income.

    If I can advance these theses, why can’t Albo’s enormously highly paid “advisers”?

  2. Allan Kessing says:

    All last week, the “government” vamped and blocked all questions about the draining of NDIS funds with the reason that it is a “needs based” system.
    And because the strictures, parameters & hoops to jump through to qualify have been made so difficult for claimants that many give up, unable to cope.
    Hence demand is less and the funds are surplus.
    Simples.

  3. Colin Cook says:

    Check out the Future Fund website. The fund that underpins – or will in the future – the unfunded liabilities of politicians’ and senior public service pensions lists Federal Government surpluses as one of its sources of funds. Is this why both major parties give a ‘surplus’ such priority? Surely not!

  4. Alasdair Wardle says:

    The real unemployment figures are much worse that the Government tells. Roy Morgan has been tracking the real figures for years: http://www.roymorgan.com/morganpoll/unemployment. The Federal Government is not a household budget, and the concept of a surplus being ‘good’ is simply nonsense. Prof Stephanie Kelton is coming to Adelaide in 2020 to speak at a conference about Modern Monetary Theory, which will bring much needed honesty and clarity about the nature of the Australian economy.

  5. Malcolm Crout says:

    The ABS are part of the fiction spinners with their now revealed fudging of the recent unemployment numbers. Josh F looked uncomfortable delivering the fairy tale, bumbling out some incoherent nonsense that even made my wife chortle. Funny if it wasn’t so serious. After Morrison shook his big stick at the Public Service chiefs, we need to look much closer at the numbers to derive the true state of the economy.

    This fascination with a budget surplus can be traced back to those two Labor clowns who led the party in 70’s and managed to engage the popular imagination with the balanced budget mantra. The Libs have made an art form extending the fairy tale to the point where people talk of little else and ignore the poor wretches gagging on Newstart gruel, citing a healthy economy as surpassing the needs of real people. Frankly I’m sick of hearing the nonsense from both sides who seem to share the same hymn book. The media are as useless as bull mammary with their gushing nonsense from so called expert commentators recycling their gleanings of information obviously gathered over long lunches where navel fluff is a prime topic.

    I wonder when a truly progressive political party will appear and gain support from the electorate. Given the last election result I fear it will be a long time before the electorate engage their grey matter and get rid of this rotten bunch. Meanwhile Albanese fumbles through the corridors of power looking anything but a leader. And we thought Shorten was bad! ………………sigh

  6. Barry Reynolds says:

    Not to mention the under spend on the NDIS, some 4 billion, give or take

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