Last Tuesday, Josh Frydenberg handed down this year’s highly anticipated Federal Budget. Australia was absolutely ‘Back in Black’… a deep black hole from which only a 10 year Odyssey could deliver Australia from Troy to the safe harbour of balanced budget in Ithaca.
As the camera panned across a sparsely populated parliamentary chamber, I could almost sense Morrison reciting the next day’s catch phrases to himself. Hear, hear.
How good is record debt! How good are tax cuts! How good are instant tax write-offs, carried forward losses, loss carry backs and subsidised serfdom! It was corporate Australia’s wet dream.
I have a sense that in a time of crisis, politicians are bit like actors that are chosen to star in Mafia movies. Actors love it because they can swear profanities, act repulsively and get away with it.
Similarly, Mr Frydenberg abandoned years of (supposed) fiscal rectitude, thrift, debt and deficit hysteria and went on a spending rampage shooting tens of billions of sugary quick fix dollars across the nation like a man possessed (or off his face), that would make even Tony Montana proud.
In 2020, we have all been asked to ‘pivot’. The Liberal Party lead by example, jettisoned its entire ‘brand’ and contorted itself into big spending Keynesians, masquerading behind the catch phrase “what was the alternative.”
Be in no doubt. The budget had two goals. Firstly, to pump prime private industry (wink, wink, Liberal Party donors and faithful) in the vain hope that trickle down will beat a severe recession and secondly, to win the next election.
Growing up as a young boy in the seventies, playtime was our favourite time at school as our imagination ran wild and we emulated our favourite superheroes. As soon as we were let out from class, we were at once transformed into Aquaman, Spiderman, Superman and the perennial favourite Batman. Each superhero was morally impervious and capable of conquering all evil.
Suddenly, there was a new action man in town – Steve Austin, The Six Million Dollar Man. Six million! All of a sudden, every other superhero was passé.
Without knowing it, we had been shunted onto society’s conveyor belt that to be wealthy, to be unobtainably expensive, was to be good.
The seventies flowed into the eighties. Economic liberalisation was set loose, banks were deregulated, hundreds of millions were flowing and greed was good. Before the decade was out, the hideous image of Kerry Packer fronted the cover of BRW Rich List issue with the caption – The Billionaire.
For a generation, a harmonious and equitable society became neoliberalism’s play thing. Twenty eight years of uninterrupted economic growth fed increasingly more aspiration and attainment. Tax policies favoured the well-heeled and climbing the ladder was applauded. Social inequity, the growing underclass and tenuous employment were for wimps or at best, collateral damage.
Australians had become the most indebted in the world with the highest levels of casualised and insecure employment. Australia also leads the world in gambling and drug addiction and obesity, domestic violence and depression rounded out the quadrella. How had it come to this?
Then, for a brief moment, 2020 closed down this Ponzi scheme – including the bloody pokies! Society had time to catch its collective breath and reflect.
Time with the family, caring for thy neighbour, helping the frail, housing the homeless, a carefree walk in the park and appreciating the ‘garbo’, were brought into relief.
Faced with economic calamity, unseen since the great Depression (in late March a million Australians lost their jobs in one week), the Liberals were dragged kicking and screaming and finally adopted a guaranteed minimum wage that saved Australia – JobKeeper.
Like a Great White, for thirty years we were constantly moving forward. Suddenly the blinkers were off and society seemed capable of escaping the treadmill’s vice-like clutches.
So the scene was set. Enter stage right, the Trillionaire.
Billions for ’everyone’ from the Joshua Tree
Sadly the Budget was but an orgy of Government spending, tax cuts and tax forgiveness to the well-heeled with a side helping of petty bribes (tax cuts) to underpin popular appeal.
The biggest measures were directed to robust, already profitable businesses that are able to benefit from instant tax depreciation. Business leaders have since lined up like choir boys to sing the praises of the benefits of the budget, knowingly, that these benefits quickly morph into rights. If in doubt, see Costello’s capital gains, negative gearing, franking credits and superannuation provisions.
Some businesses are more equal than others.
It seemed that sectors hardest hit – the arts, hospitality, travel and small retailers – that are in a limited position to leverage on the benefits on offer, benefited least in the budget. Winding up JobKeeper in these industries in March has the real potential to become JobReaper.
What good is a Tax Cut to someone unemployed? What good are investment allowances and tax right offs to businesses that have been ravaged by the shutdown and have pillaged savings, including super, just to stay afloat?
All the while, Treasury has punted on taxpayers spending their ‘bribe to subscribe’ and not squirrelling it away. This is the same mob that predicted a V shape recovery by now, that predicted a $17.6 billion stimulus on the 12th March would hold off a recession. Ten days later, on the 22nd of March, they believed a $66 billion carpet bombing of SME’s would hold off mass unemployment and that Centrelink could look after those ditched off the back of the train. You’ll remember how that went down.
Their form has been found wanting and it would be funny if only it wasn’t so serious.
National Gross Debt will reach $1.8 trillion dollars by 2027. Paul Keating’s debt truck would fit many times over in the sumptuous bowels of Frydenberg’s debt ocean liner.
Courtesy of record low interest rates, the debt is imminently serviceable. But where was the vision, the reform, the ambition and the equity?
Swathes of people remain left behind including those on temporary working visas, university staff, international students, self-funded retirees and the homeless.
An opportunity missed
Given the Government is in a position to borrow and spend big, in light of the COVID economic train wreck, it had plenty of alternatives.
It could fast track legislation and incentivize projects such as the already proposed $22 billion Solar City in the NT. It will be the biggest solar farm in the world with a battery 300 times larger than the next biggest battery in the world with an undersea cable to Singapore to be able to export our most bountiful natural resource in perpetuity – sunshine. It would make Tesla’s SA solar/battery project look like a Lego set!
Simultaneously this would help catapult Australia into a renewable energy superpower and set up an industry of the future – it would be Morrison’s equivalent of Chifley’s post-war Holden. Wow!
In 1987, Hawke announced that “by 1990, no child would live in poverty”. This was courtesy of major reform of the social wage. He was meant to say that no child would need to live in poverty, but mangled the delivery. Nonetheless, you have to admire the raw ambition of such a statement.
Australia now has 110,000 homeless and 200,000 on the public housing waiting list. Frydenberg announced an extra $1 billion in concessional loans to the not for profit sector to address the shortage in public housing. This will deliver approximately 2,500 homes, enough to house 5,000 people.
It is completely the wrong way round. We need to start at the end and commit to “no Australian will need to be homeless by 2030” and then set the wheels of government and industry in motion and borrow to build the social infrastructure to achieve the end point. And be proud of it.
Building 100,000 homes over the decade would provide a pipeline of work that would necessitate builders offering young people secure full time work upon which they in turn could build a future, much as our parents did in a post war Australia of full employment.
The Liberals could then shove their $200 a week subsidy to the under 30’s.
The city that has wrestled the title of the most liveable city in the world from Melbourne, Vienna, proudly boasts more than 50% of its population in social housing. After all, housing is a home to be lived in, not to be an investor’s escalator to riches.
The Federal Government could have backed ambitious urban renewal projects such as Melbourne’s proposed $50 billion suburban rail loop that would transform our city and bring meaning to the catch phrase a 20 minute city.
Instead of this type of project, the Liberals have punted on releasing individual’s animalistic instincts, increasing the gradient of the treadmill and in the hope that raising dust and clamour, it won’t have to trouble itself with the minutiae.
Someone should remind Josh that even his hero, Margaret Thatcher, advised that Socialism (Corporate welfare) is great… until you run out of other people’s money.