Spendathon or spinathon?
With an election looming, the Coalition seeks a political recovery
“Australia is coming back.” This was how Treasurer Josh Frydenberg both opened and closed his third federal budget speech (and his second within a COVID-19 context), hammering the “recovery” theme – though at times it wasn’t clear whether the focus was on pandemic recovery or political recovery ahead of the upcoming election. Australia may be “coming back”, but the surplus certainly is not: as was foreshadowed, there was no pivot towards austerity, and still no end to the deficits in sight, although there were revisions to the forecasts, with those for 2020–21 revised down to $161 billion ($52.7 billion lower than the latest prediction). Days of widely spruiked multibillion-dollar spending drops on aged care, infrastructure, tax, mental health and “women’s issues” left very little to be revealed in tonight’s big show, although we finally got our hands on the official totals for the big-ticket items: $17.7 billion for aged care (over five years, not four), $15.2 billion over 10 years for infrastructure projects (though none are particularly transformative), $30 billion in tax cuts and breaks (though mostly to small business), $2.3 billion for mental health, and a larger-than-expected $1.1 billion to women’s safety measures (including $261.4 million for frontline family, domestic and sexual violence services). Frydenberg had insisted, over the weekend, that the big-spending budget would not be a “spendathon”, though that’s exactly how all those cash splashes made it seem. So was it a spendathon or a spinathon?
Many of the top headlines surrounding tonight’s budget – whether from The Australian or The Guardian, the ABC or Nine – have focused on its big-spending on services, or its “spending splurge”, with a $106 billion deficit predicted for 2021–2022, despite so many of the government’s pandemic supports having already been withdrawn. It certainly does appear to be a cash-heavy budget. While plenty of groups missed out, there doesn’t appear to have been any major cuts. Nine political editor Peter Hartcher writes that when he asked Frydenberg whether there were any cuts in the budget, “he merely emphasised that it was ‘a pandemic budget’”, while the “losers” sections of the media’s ultra-simplified “winners and losers” lists are shorter than usual (both Nine and News Corp list “future generations” as the top loser). But how much cash was really splashed? Plenty of the billions come in the form of tax cuts, rather than services spending: $7.2 billion to continue the low and middle-income tax offset for another year (though this is more an absence of a tax increase than a cut, despite Frydenberg’s insistence on calling it a “new and additional tax cut”), and $20 billion in further tax breaks for small businesses.
And while some of the figures being added to services are eye-watering, many believe the budget doesn’t go anywhere near far enough in its spending. The aged-care boost falls well short of the $10 billion a year being called for, while the long-awaited “women-friendly” budget – aimed at addressing the perception that the Coalition doesn’t care about women – involves a lot of returning of money to services that had been cut for years. The budget fails to provide any specific funding to renewables or universities, the ABC notes (The Australian, for its part, notes that the ABC has missed out), while its silence on climate change and the arts are disappointing but not surprising. Nine’s economics editor Ross Gittins calls it the “couldabeen budget”, adding that “as a pre-election vote-buying budget it hardly rates”.
Couldabeen or not, the government has aimed to please as many people as possible with what is very likely a pre-election budget, papering over some political weaknesses (women and aged care), while hoping to upset as few groups as possible. Most of its major spending promises were widely canvassed ahead of budget night, to ensure proper attention for each individual billion, and those billions are continuing to get plenty of coverage tonight, as analysts begin the task of determining just how effectively the big spending has been targeted. For all his claims that the budget isn’t a spendathon, that’s certainly the picture Frydenberg has managed to create, and the impression many are going to walk away with.
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“Australia is coming back.” This was how Treasurer Josh Frydenberg both opened and closed his third federal budget speech (and his second within a COVID-19 context), hammering the “recovery” theme – though at times it wasn’t clear whether the focus was on pandemic recovery or political recovery ahead of the upcoming election. Australia may be “coming back”, but the surplus certainly is not: as was foreshadowed, there was no pivot towards austerity, and still no end to the deficits in sight, although there were revisions to the forecasts, with those for 2020–21 revised down to $161 billion ($52.7 billion lower than the latest prediction). Days of widely spruiked multibillion-dollar spending drops on...
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