Nation’s eyes on Treasurer Josh Frydenberg as budget looms
When the dust settles on what Scott Morrison calls one of the most important budgets since World War II, Treasurer Josh Frydenberg will have revealed a deficit he never expected. And sources say there are still some surprises to come on Tuesday night.
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Next Tuesday’s budget is like nothing Josh Frydenberg ever expected.
Instead of delivering a long-awaited surplus, the documents will be a sea of red, with the deficit is tipped to crack a record $200bn.
There won't be a kiss from his wife Amie and a cuddle with his kids, Gemma and Blake, when he finishes his speech in parliament at 8pm. The family will have to settle for a FaceTime call.
And when the dust settles on what Scott Morrison says is one of the most important budgets since World War II, the Treasurer won’t even have time to catch his breath. By November, it will be time to start work on next year’s budget.
It’s now six months since the Prime Minister announced the biggest day on the political calendar would be delayed from May to October because of the COVID-19 crisis.
“It feels like we’ve done three budgets’ worth of work since then,” a senior government figure reflected this week.
As the pandemic reached Australia’s shores, months of post-election policy development was put on hold or thrown out the window.
Health Minister Greg Hunt, Frydenberg’s close friend and fellow Victorian, turned all his attention to the health impacts of the coronavirus, while the Treasurer set about “cushioning the blow” for workers and businesses.
The JobKeeper wage subsidy, the doubled unemployment payment and a range of other measures helped stave off the economic armageddon seen overseas.
But after a world-beating run of three decades of economic growth, Australia is now in the grip of a once-in-a-century recession.
Budgets are typically political documents full of initiatives and reforms in all sorts of areas. Next Tuesday, Frydenberg has just one mission: create jobs.
In an interview with the Herald Sun, he describes how recessions at the start of the 1980s and 1990s caused long-term economic scarring as the unemployment rate remained stubbornly high for years.
“We know that young people who stay out of the workforce for longer find it very hard to get back in,” Frydenberg says.
“Being a father is an inspiration for me in this role because I’m motivated by wanting to create a better Australia for the kids of today, but also the kids of tomorrow, and provide them with even better opportunities than I have enjoyed through my life.”
Border restrictions mean the father of two has spent most of the last six months in Canberra, rather than at his home in Hawthorn.
While some Victorian federal MPs have moved their families up to the capital for the rest of the parliamentary year, this has not been an option for Frydenberg, with his wife a busy lawyer and his daughter wanting to be with her friends in her first year of school.
He is keenly aware of the “devastating” situation in his home state, and has used his position as the senior Victorian in the federal government to forcefully lobby Daniel Andrews to get kids back in classrooms and businesses back to work.
“The best thing that can happen for jobs in Victoria is that the restrictions are eased in a COVID-safe way,” he says.
Frydenberg and Morrison have already outlined a series of major job-creating budget commitments, including $1.5bn to reboot Australia’s manufacturing sector, $1.9bn for new energy technologies, and sweeping changes to lending and insolvency laws.
Both have also foreshadowed fast-tracking income tax cuts, incentives for employers to take on new workers, a business investment allowance and extra help for pensioners.
These moves will be costly. But Frydenberg has not been limited by trying to offset new spending with savings elsewhere.
Based on the advice of Reserve Bank Governor Philip Lowe and Treasury secretary Steven Kennedy, the government has decided to spend its way out of the crisis, and in doing so, give businesses and consumers the confidence to do the same.
Senior sources say there are still some surprises to come on Tuesday night to “put a rocket” under the nation’s economic recovery.
“We’re in unprecedented circumstances and that means next week’s budget is going to be at a scale that we haven’t seen before,” Morrison says.
Of course, their plan depends on the virus remaining under control, and ultimately, whether a successful vaccine is created.
Some Liberal MPs believe the short-term, job-creating focus of Tuesday’s budget paves the way for deeper structural reforms in next year’s budget. Key reports on mental health, aged care and retirement incomes will be central to that.
Assistant Treasurer Michael Sukkar, another Victorian MP, says the government’s response to the economic crisis has been “a constantly evolving mission”.
“I think we have got the balance right in ensuring the support needed is there, but that it is temporary and targeted as to not weigh down our recovery on the other side,” he says.
“While the government response has been a team effort across the board, it’s difficult to describe the sheer volume of work and responsibility the PM and the Treasurer have had to shoulder to navigate us through.”
The test for Frydenberg is whether his boundless confidence can rub off on the rest of the country.
“Australia is a remarkable place and we have a lot to be optimistic and hopeful about,” Frydenberg says.
“These are tough days but we will get through them, and the budget is the next stage in our economic recovery plan to rebuild our economy and secure our economic future.”
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