The one night stand federal budget

If it was remarkable how little hype there was going into this year’s budget, the rapid speed at which it receded from the news was more normal.

Even so, some unfortunate analogies do suggest themselves: other circumstances where there is a significant build-up of expectations, the event itself is somewhat anti-climactic, and often over too soon.

In this instance at least, one imagines that the Coalition is satisfied with its performance.

At the risk of pushing this particular imagery too far, despite having been around for almost a decade, the government actually delivered a ‘one-night-stand’ budget.

Like an allegorical cheap Lothario in a dank nightclub, the budget contained a bunch of no-strings attached measures, all short-term without much policy substance behind them. Meanwhile grand promises abound of big spending in infrastructure and defence, but all safely out in the future where no accountability can be laid at the government’s feet.

For example, one of the key budget measures was a cut in fuel excise, to come into effect on budget night, designed to bring petrol prices back under $2 a litre. Which it duly achieved. But with the natural variation in petrol prices exceeding the cut in excise, will anyone remember the government’s ‘heroic’ action at the ballot box in May?

And this was perhaps one of the more justifiable policy decisions — at least from a political perspective — because of the visibility of petrol prices and their sudden increase.

The one-off payments to welfare recipients and low and middle income voters, conveniently encompassing the bulk of the voting public, were basically election bribes with a fig leaf of justification, at best.

Welfare recipients were just recently compensated for cost of living increases via the biannual indexation of payments, while low- and middle-income voters were already due to receive the twice-extended LMITO at the end of the financial year.

It looks like naked political opportunism.

Even from a political perspective, it’s not clear that such short-termism is the best way to win an election. After all, the temporary nature of the key elements of the 2022 budget stands in sharp contrast to the last pre-election budget delivered by the Coalition in 2019.

The Coalition announced significant tax cuts in both the 2018 and 2019 budget. Leaving aside the politically expedient LMITO, the tax cuts were part of a longer term vision to flatten the tax scales, leaving most voters facing the same marginal tax rate by the mid-2020s.

The government also announced a series of projected budget surpluses, though the ravages of Covid rendered such prediction laughably inaccurate.

This fiscal conservativism (even though it was somewhat fraudulent) allowed the Prime Minister to position his party as a steady-as-she goes alternative to the relatively radical agenda of Labor’s Bill Shorten.

The lack of grand plans in the budget was actually a selling point for a new Prime Minister and Treasurer team.

While some things remain the same, massive changes have occurred since the 2019 election.

Shorten, in his budget reply in 2019, laid out an expansive alternative vision for Australia. In Albanese’s budget reply, he was careful to make Labor a tiny target.

Albanese has ditched huge swathes of his predecessor’s platform, even if one suspects some elements may be miraculously resurrected following an election victory.

Morrison also carries the burdens of two years of pandemic crisis management, bookended by significant natural disasters.

The risk for the government is that the short-termism in the budget doesn’t look like sensible action in the face of temporary obstacles, but a government bereft of an agenda for a fourth term in office.

If the government isn’t going to unveil a great new policy agenda, then its wingman in its re-election bid will be the robustness of the economy.

Economic conditions are so radically improved from where they were in the 2020 budget that it can scarcely be believed.

Unemployment is heading towards levels that have not be seen in the lifetimes of many voters. Though there are good reasons to criticise JobKeeper, the government will take considerable credit for its alleged impact on the labour market.

Economic growth is better than most other comparable countries. Australia is a world leader in recovering for the economic impacts of Covid.

Headline inflation is high, but as it has been below the RBA’s band for the best part of a decade, this isn’t yet as dangerous as the inflation emerging in the United States and United Kingdom. Moreover, the medium-term outlook for Australia is for inflation to return to within the target range.

The government has failed to address rising house prices but, as the ‘beneficiaries’ of this policy failure are likely Coalition voters, it’s not clear this is nearly as harmful to their re-election chances as it should be.

The biggest failure is the blow out in debt and deficits. One unfortunately consequence of years of spending is that interest on government debt will move to six or seven on the list of top 20 government spending programs — above the DSP, JobSeeker payments or the Child Care Subsidy. The political cost of this is unclear.

That said, for a government that has shovelled hundreds of billions of dollars out the door in the last two years, it has shown an unusual amount of modesty in how much of its economic windfall it was willing to spend chasing votes.

Of course, some might suggest the relative paucity of the payments have an alternative justification explanation — with inflation high and rising, there is far less room for stimulatory fiscal policy.

Or just possibly, in the words of the recently departed political scientist Michael Lee Aday, there are in fact things the government won’t do for the voters’ love.