Federal Treasurer Josh Frydenberg delivered the government’s federal election pitch – ahem, Federal Budget – last night, in a rousing rant clearly aimed at wooing voters.
A multibillion-dollar cost-of-living package and a temporary halving of the fuel excise was the centrepiece of the 2022 Federal Budget.
But the focus was clearly on the impending election. And the electioneering started early.
Mr Frydenberg set a low bar by reminding voters of the world’s troubles. He first pointed to the war in Ukraine, paused, then jogged our memories about the continuing pandemic before moving on to the catastrophic floods that have wiped out thousands of homes and livelihoods.
Then he reminded us that a strong economy means a strong Budget – lucky he’s our Treasurer.
The deficit is now $78 billion – or 3.4 per cent of GDP 2022‑23 – which is expected to halve to 1.6 per cent by 2026.
This is testament to the Coalition’s economic management, said the Treasurer, which justified the “clear lines” the government drew when it, perhaps prematurely, ended the economy-wide pandemic support.
“When we did so, those opposite were quick to criticise,” he said. “When Labor starts spending, they simply can’t stop. The result is higher taxes and higher interest rates.
“Only the Coalition can responsibly manage the Budget and strengthen our nation’s finances.”
The pitch continued.
He focused on percentages, not dollar signs. But regardless of his adopted nomenclature, voters should know that the Rudd-Gillard government saw Australia through the global financial crisis with net federal debt equivalent to 13 per cent of GDP.
The Abbott, Turnbull and Morrison governments blew this out to 19 per cent of GDP by the time the pandemic hit.
Net federal debt is currently 31 per cent of GDP and, by the end of the forward estimates, is projected to be 33.1 per cent of GDP.
“This is almost double the next biggest debt burden that the Commonwealth has carried since 1970, as a proportion of GDP,” Peter Hartcher wrote for The Sydney Morning Herald.
“No other government, including all the Labor ones, even comes close.”
Prime Minister Scott Morrison has been touting budget day as the first victory in a battle that will lead the government to a famous win come election day.
It remains to be seen whether the government can claim victory now or on the yet-to-be-named election day in May, but older Australians can enjoy at least a few wins, just not many from the actual Budget.
They already won earlier this month by receiving the biggest Age Pension boost since 2013. A hollow victory, considering they, too, are feeling the pressure of rising living costs, but a victory nonetheless.
The superannuation measures announced in the last Federal Budget will go through on 1 July, as announced last week. This, too, is great news for many retirees.
But there is a little more. Pensioners will receive a one-off cash payment of $250 to help with cost-of-living pressure. Payments will be made within weeks.
Fuel and housing costs pushed inflation up 1.3 per cent in last three months of 2021 to reach an annual rate of 3.5 per cent and pundits predict inflation could reach 5 per cent by mid-2022. So, older Australians with cars will benefit from the temporary halving of the 44.2 cents per litre fuel excise.
When including the fuel excise, the Treasurer says single pensioners will be better off by $500 over the next six months. Cost-of-living pressures for pensioners sorted. That’s all folks.
There may be fewer parents or grandparents needing to crack the nest egg to get their children or grandchildren into their first homes. The first homebuyer deposit guarantee scheme could help young Australians get into the property market with a deposit of just 5 per cent. It will be nearly doubled with 50,000 additional places.
To get more Australians to take up work in the aged care sector, an extra $49.5 million will be provided to subsidise 15,000 vocational education and training places, as well as a further $468.3 million to support aged care services, taking the total investment to $18.8 billion.
“In this year’s Budget we’re providing more opportunity for people to enter the aged care workforce as part of our plan for a stronger future,” Mr Frydenberg told the ABC.
More ‘lollipop’ funding for aged care? Funding is not the issue. It’s what’s being done with the funds that counts. The biggest fear after the last royal commission was that the government would simply throw more money at the sector. What this government needs to do is police spending in the aged care sector. Who’s watching where the money goes? The inquiry was merely a public slap on the wrist for aged care providers, followed by a funding windfall.
We’ve all seen what happens to kids when parents tell them off then give them a lollipop immediately afterwards.
A report released on Tuesday revealed how taxpayer funds are being used by many aged care operators to expand their businesses and acquire new companies instead of the intended purpose – to improve food standards.
The Centre for International Corporate Tax Accountability and Research report, Careless on Accountability, released on Tuesday, analysed spending on food and found “scant evidence the extra $10 a day given to operators was going solely to food”, says the SMH.
Aged care operators “are not accountable for how taxpayer money is spent”, said report author Jason Ward.
Where is the governance?
“We will need to see more accountability from aged care providers about their spending of this extra money,” says Council of the Ageing Australia chief Ian Henschke.
“While the increased transparency included in the government’s reform package is appreciated, more transparency is required to ensure funding is being spent as it is intended.”
Government has time and again proven unwilling or incapable of governance in the aged care sector, monitoring the NDIS and even its own hallowed halls.
NDIS funding is the same. We know of first-hand accounts of the wasteful use of taxpayer money in this sector not unlike reports of aged care funding abuse.
And yet the government remains disinclined to implement adequate governance of spending.
The unemployment rate fell to around 4 per cent. Fewer jobless translates to reduced unemployment payments saving taxpayers about $11 billion over the next four years.
With unemployment so low, there are hopes that wages will rise – so too, the Age Pension.
The $1080 low- and middle income tax offset (LMITO) will, as predicted, be cut at the end of this financial year.
Overall, this pre-election cash splurge is short-sighted, with a range of measures and spending aimed at getting voters to take their eyes off the ball and get the government over the line in the next six months.
“Money has been spraying around for almost a decade, but we are getting no value for money,” said shadow treasurer Jim Chalmers.
Opposition Leader Anthony Albanese has said Labor will soon make its position clear on budget measures but that “we’re unlikely to say, ‘no, don’t give people a one-off payment’.
“What we need is a plan for the economy, not a plan to get the coalition a fourth term in office.”
It is a sentiment shared by many.
“This Budget ignores the big challenges that this country faces right now, which are poverty, inequality, and climate change. It doesn’t deliver a budget people can rely on,” says Australian Council of Social Service CEO Dr Cassandra Goldie.
“Unfortunately, although the government says this is a cost-of-living Budget, it fails to deal with the biggest cost of living, which is housing,” she says, noting that the $3 billion to be spent on the fuel excise could have been better spent funding public housing for those really feeling the pinch.
“This Budget is full of temporary fixes when we need permanent solutions.
“The Budget does nothing to lift the incomes of people with the least. While we welcome the extension of a $250 bonus payment to people on pensions and allowances, if you’re living on $46 a day, this payment will help for a week or two, but people must pay the rent 52 weeks a year.”
We’ll round off with a quote from long-time YourLifeChoices commentator Matt Grudnoff, senior economist at The Australia Institute.
“In over a decade of covering budgets, I have never seen a budget so lacking in a plan for the future,” he says.
“This Budget is an incoherent mess. It is a transparent attempt to fill whatever hole the government thinks is most urgent in the lead up to the election.
“This Budget shows that without a plan for where to go, it is impossible to lead the way.” Here, here.
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