NEWS. RESOURCES. DADVICE. THE HOME OF MEN-TERTAINMENT

Axe hangs over Morrison’s legacy as government gets serious before budget

SHARE

Slashing budget deficits have long been cast as a Treasurer’s reason for being.

But Jim Chalmers was muted after announcing a 60 per cent reduction on Tuesday.

Record-low unemployment means less COVID-19 support payments, while the war in Ukraine has sent the price of global commodities, and government royalty revenues surging. Which combines to about $50 billion.

But Dr Chalmers said that left room only for a “standard bread and butter budget”, citing the need to make room for fiscal “pressure”.

He and Finance Minister Katy Gallagher repeated that 17 times in the course of a press conference.

Warnings about the dire state of the books are pretty close to the oldest trick in the post-election playbook, used for everything from a mandatory lowering of expectations to a radical scaling back of election promises.

Former Treasury official and veteran economic journalist Peter Martin noted that Tuesday’s presser was held to mark the dubious occasion that the official pre-budget figures were just one week away.

“Jim Chalmers is a student of the budget tradition of expectations management,” the visiting fellow at ANU’s Crawford School said.

But Senator Gallagher was dead serious when she made the extraordinary statement that every single policy that announced by the Coalition in March in its final budget was up for review.

“We’re looking at them all, all of those commitments line by line,” she said. “We’re going through due process.”

The government had long flagged a review of Coalition rorts and waste, but those terms are well-worn parts of the Canberra budget script.

The asterisk next to a year of programs is a stunning rebuke to the Morrison government’s legacy but reflects a seriousness that is maintained behind closed doors.

The New Daily has confirmed that the secretive committee holding spending review sessions of eight hours or longer is meeting at unusual frequency – twice a week.

The cancellation of an $18 million grant to the physically non-existent charity that the Governor-General had lobbied for was one of many line-by-line decisions. It was announced recently only because of a public outcry.

What else has been axed is yet to be announced.

The discovery of what seems to be a simple accounting error revealed on Tuesday is another attack on the Coalition’s competence.

Some $5.5 billion worth of programs included across the March budget, ranging from flood and pandemic recovery costs to a closing the gap initiative for Indigenous disadvantage.

This was not the application of rhetoric to a change in forecasts, fiddled assumptions or a blowout in program costs but shoddy work.

The Coalition went hard during the election campaign’s dying days and attacked Labor for not being upfront about its costings.

When they were released, at the usual time, the Coalition made the most of the extra $7.5 billion that would be added to the deficit under a Labor government.

“They’re admitting higher deficits,” then finance minister Simon Birmingham said.

“But it’s what’s not in this document, that is perhaps even scarier and riskier for the Australian economy and for Australians, who rely on a government with competent economic management”.

Senator Birmingham and his successor as the opposition’s finance spokesperson, Jane Hume, did not answer questions on Tuesday.

Paul Keating’s discovery of a similar blowout in 1983 was a chance to cut back government spending and stamp Treasury authority on the aspirations of fellow MPs.

But unusually for a budget review committee – which is usually a razor gang numbering a handful or on a similar committee in the Morrison years, one – an unwieldy nine MPs are sitting until late into the night with the ruler.

“They need to make way for a bucketload of expenditure,” Martin said.

Labor faces a structural deficit and blowouts in defence, aged care and the NDIS.

Its MPs are meeting in earnest to broker a consensus approach to a miserliness it believes is the new normal, as long as government expenditures and taxation keep drifting apart.

But the government that has committed to holding to a promise to keep Stage 3 tax cuts is not passing up the time-honoured budget tradition of setting expectations about the difficult decisions that must (eventually) come next.

“There are multiple opportunities in multiple budgets, over the course of the next three years or so, for us to properly engage the people in a proper national conversation about the services that we provide, and how we fund them,” Dr Chalmers said.

Source: Read More

We’ve Already Come Too Far To End This Now.

Subscribe To Our Weekly Newsletter

Get notified about new articles