The Federal budget was handed down on Tuesday, and most of the chatter about it generated was about the size of the deficit, which is pretty big. It’s not surprising. There’s been so much ill-informed nonsense about the perils of a budget deficit that it’s a bloody big issue – much bigger than it should be. Ironically, most of the nonsense has come from the conservative side of government attacking the irresponsibility of the progressive side. This time, it’s the progressives attacking the conservatives.
I think talk about budget deficits is one of the biggest furphies in Australian politics. Though generally, you wouldn’t know it, a deficit is necessary to spark economic activity. Sure, it means that you spend more than you’ve got coming in, but most of that extra cash goes out into the community, who then go out and spend it. That’s the theory, anyway.
The Libs demonised it for years and successfully, so much so that it has a distinct narrative of its own. For the great unwashed, and reference to a budget deficit must mean fiscal irresponsibility, not economic wisdom. It’s worked well for the Libs politically, though the irony is that historically we incur more debt under LNP governments than ALP.
For years, the LNP espoused the neo-liberal doctrine, as have most conservative governments around the world. Now, most of that is nonsense. We went through the destructive phase of austerity globally (a trend the Australian government, under ALP, successfully bucked in the GFC). In more recent times, it’s been about tax cuts, generally to business and the top income earners, and a crackdown on working conditions – wages, penalty rates, and so on. For Australia, this has seen us plunge from being the top-ranked economy in the world to middle-ranked, at best. We’ve had a succession of terrible treasurers.
I don’t rate Frydenburg as a good treasurer – in fact, I often wonder if he knows what he’s talking about. But in this instance, I reckon he’s done the right thing.
It’s quite a turn around in thinking in the government, probably helped by the fact that it’s an election year and people like having money spent on them. The money is well spent, though perhaps it could have been divvied up a bit differently. The fact of the matter is that there’s a time to spend big, and recovering from a pandemic is one of them.
Having got the bit of grudging praise out of the way, there’s a couple of things coming out of this budget that have me seething.
For the life of me, I can’t comprehend why you’d cut money going to health after – and during – the biggest health crisis for many a generation. I was startled to hear that the government had cut the health budget for Victoria.- its least favourite state – by $93m. What gives?
Somewhat related, the Vic government went to the feds a couple of months ago with a proposal to co-fund a new purpose-built quarantine facility on the outskirts of town rather than in the middle. It’s something we desperately need, and everyone knows it except the government, who pledged nothing towards it in the budget on Tuesday. Instead, they included half a billion to continued financing of offshore detention facilities – a terrible waste of taxpayer money and utterly inhumane as well.
What angered me most was the statement that we wouldn’t open our borders until the middle of next year. I’m surprised it hasn’t created more outrage. It would be more appropriate to channel the misguided outrage from budget deficits to how we’re managing the transition back into the world economy.
I struggle to understand why the government would make such a pledge. Is it political? Have they seen how stringent border controls have worked for state premiers and want a piece of that? Or is this some lofty goal to achieve elimination? Why set a date? Why not just make it flexible, as common sense would clearly dictate?
I’ve been supportive of the cautious approach, and the results seem to bear that out. But it’s ridiculous, when swathes of the world are now looking to re-open, that our government has made a pledge to remain closed.
This, for me, is a clear outcome of the failed vaccination program. I reckon the number one priority for the government should be to get every Australian vaccinated by September/October, by whatever means. Instead, they’ve made a vague commitment about the end of the year, though not both doses.
This is going to cost us economically. We did brilliantly through the pandemic to contain it, while in the rest of the world, it pretty well ran riot. But then we utterly fudged the vaccination program when most of the world have done so well with it. The result is that the countries that suffered most will open up much sooner than us, one of the countries that suffered least. If that’s not mismanagement, what is it?
As I said, the economic cost will be significant – but it’s the social costs that bite deepest. I’m getting antsy about travelling. I feel locked up, and sure, I was willing to accept that – but for another year-plus? No way. But look, it’s relatively easy for me. I don’t have family abroad I haven’t seen for years. I can manage. For those separated from loved ones, this is a catastrophe. Who thinks about them?
Clearly, the vaccination program must get a push on, by hell or high-water. An obvious corollary to that is the construction of dedicated quarantine facilities to manage incoming travellers and further outbreaks of the virus. There must be a clear plan, and there isn’t. It’s absurd.
The risk is that we may not manage to open without this. There’s sure to be further outbreaks, and the virus will continue to mutate, and others will emerge. We’re in this for the long haul, and we have to build for that. I’m furious.
Edit 18/5: I’ve been thinking about the issue of opening our borders sooner and concluded this is actually a wily plan to downplay their failures around the vaccine rollout. We know they only care about the politics and how they look, and the vaccination program has been a well-publicised disaster. One way to reframe the conversation is to announce that international borders won’t be opening until Covid is effectively gone, making the failures around vaccinations less critical.