Australia is now racing to the line. In six weeks we could have a new government. Or not.
Josh Frydenberg’s fourth budget is a gift to Scott Morrison. It plays to what are left of his strengths. Boiled down, it delivers a three-themed campaign, tailored to outer suburban and regional marginals:
1 Your job’s secure.
2 We’re giving you cash.
3 Here’s some cheap petrol.
It allows him to say “we’re listening, we understand” about the inflationary pressures people are confronting in the vegetable aisle and the servo.
Forget the entirely correct complaints that there are no reforming ideas on offer. That spending way into the future is still higher than Labor’s at the depths of the GFC. That the promises of being “back in black” have morphed into deficits for a full decade of Treasury forecasts. That billions of dollars are being wasted on pork-barrel boondoggles.
The Scott Morrison of three years ago could have won with this budget. Even now, Labor is careful not to write him off. In early 2019, some Labor MPs and many buoyant staffers would privately tell you – “mate, it’s all over”. In 2022, no one says that out loud.
The 10-point two-party-preferred lead Labor enjoys on Newspoll will inevitably narrow as the election closes in. The polling is an expression of anger; it is not a sure gauge of polling booth behaviour. And the budget has done all it can to blunt that anger.
But the Morrison of 2022 is not the grinning newbie of 2019. Concetta Fierravanti-Wells, the Liberal senator who lost her factional fight for a winnable spot on the party’s NSW ticket, told the Senate on Tuesday he was “ruthless, a “bully…not fit for office.” Unflattering text messages from other senior Coalition figures leaked earlier this year reveal similar hostility.
A second round of fatal floods in the NSW Northern Rivers, an extension of what was already in dollar terms the most expensive natural disaster in our history, reminds voters of the unavoidable costs of inaction on climate change.
The mining industry can rightly claim credit for much of the boost to government revenues since December. But if more cash is coming in from coal, not much is going into speeding the transition to a lower emissions future.
At least, not that we can see. There is $5.4bn listed in the budget under “decisions taken but not yet announced”. This includes an announcement still to come on Australia’s new space agency – but there’s also a line item under “Energy and Emissions Reduction.” We have little choice but to wait and see.
For those taking a long-term view, the budget highlights the structural costs that are coming. Defence, rightly, is being stepped up. It needs a new kind of spending. Brutal as it is, we need more lethality at less unit price. The nuclear submarines promised under Scott Morrison’s Aukus alliance don’t even get a mention in this budget. Why would they? They’re up to two decades off.
Whoever takes government after May faces fiscal traps.
Josh Frydenberg has offered incentives to train an extra 15,000 aged care workers but not a dollar to pay them more. Labor rightly prioritises more money in the pocket for these most vital workers, amid deeper aged care reforms. Former NSW Liberal Premier Mike Baird, now CEO of the aged provider HammondCare, has endorsed the Labor election pledge as “a good plan.” But it locks more cost into any future Jim Chalmers budget.
Meanwhile, the NDIS was conceived by the then lowly parliamentary secretary, Bill Shorten, on the back of a Productivity Commission report promising the reforms would be revenue neutral. The argument was that better support for people with disabilities would get more of them into the paid workforce and liberate personal carers, often a close relative, to get back into the economy.
It was always optimistic. NDIS funding is rising into the future at more than 10% a year. Frydenberg says the NDIS will always be fully funded under a Coalition government, but it will soon exceed the Defence budget.
Anthony Albanese’s Budget Reply speech hinted at even higher spending on the NDIS. At some point, perhaps under Labor, there will have to be painful reforms. Cheaper childcare - note: there is no longer talk about it being free - and 465,000 free Tafe places have to be paid for somehow.
Albanese ended the week sitting pretty. The row over disputed claims of bullying of the late Kimberley Kitching by Labor senators has been muted by the spray at Morrison from Fierravanti-Wells. The pressure in 2019 was on Shorten, leaving Morrison with a free hand to spread daggy sunshine – and pension tax attacks – around the marginals.
The pressure is all now on Morrison. And sometimes it shows. He’s a sitting duck to questions about bullying or ruthlessness, but he can’t afford to counter-punch without looking snappy. Often, he just looks tired.
Meanwhile, Australians seem to live in a multitude of separate worlds. Business confidence is sky high. The budget papers forecast GDP growth in this calendar year of 4.75% – the same as China! When could we last say that? Consumer confidence, by contrast, is at the lowest it has been this close to an election since 1990.
Morrison may take encouragement from that. Bob Hawke, then openly stalked by Paul Keating, lost the popular vote in 1990 but hung on for the win. Can Liberal campaign director Andrew Hirst do as Hawke and Graham Richardson did 32 years ago: work a marginal seats campaign that counter-balances the general mood to throw the government out?
Maybe.
Hawke lost eight seats in 1990, but he had a 24-seat majority from 1987.
Scott Morrison has no such cushion.
Hugh Riminton is national affairs editor at 10 News First
