Andrew Bolt: Budget confused on debt, China and jobs

Josh Frydenberg didn’t once mention surpluses in his budget speech. So either the Liberals were fooling us when they claimed they mattered, or they’re fooling us now by pretending they don’t.

Two years ago Treasurer Josh Frydenberg handed down his first budget, boasting that he’d finally balanced the country’s books and given us the surpluses Australia had to have.

But who still cares about the future?

Now, in his third budget speech, which pushes out net debt to nearly $1 trillion, Frydenberg did not mention surpluses once.

In fact, he didn’t even hint when we’d ever again spend no more than we earned — something not done since the Howard government of fading memory.

Even three years from now, the budget is expected to be $57bn in the red.

It seems surpluses are so last century.

So either the Liberals were fooling us for decades when they claimed they mattered, or they’re fooling us now by pretending they don’t.

Of course, we have since been smashed by the coronavirus. And, yes, the government had to shovel out the cash to keep people in jobs — which it’s done with undoubted success.

Frydenberg was sure talking up that success in his budget speech.

Unemployment just 5.6 per cent, and tipped to slowly fall to 4.75 per cent.

And look! The deficit this year will be “only” $161bn, or $53bn less than what the government feared just six months ago.

Treasurer Josh Frydenberg did not mention surpluses once in his budget speech. Picture: NCA NewsWire/Gary Ramage

Time for a reality check before we congratulate ourselves to death.

First, some of this “success” actually comes from two government miscalculations.

The government’s medical advisers were ludicrously alarmist a year ago in predicting that up to 150,000 Australians would die of the coronavirus.

Real figure: fewer than 1000.

And the government’s economics advisers were hopelessly wrong in assuming in the previous budget that the price for iron ore — our biggest export by far — would be just $US55 a tonne. In fact, it’s just hit $US220.

Those miscalculations helped to give the government a huge windfall — that $53bn shaved off this year’s expected deficit.

And what did it promptly do with that windfall? Spent most of it. Who saves these days?

Who, when this budget is even coaxing 10,000 single parents into buying a home with just a 2 per cent deposit.

Heaven help them if interest rates ever rise again.

But the prudent should now ask what predictions the government might have got wrong this time.

Take China. Defence Minister Peter Dutton warned this month that war with China could not be ruled out.

The head of the Home Affairs Department warned staff to prepare for war.

Yet this budget assumes China will stay our biggest trade partner, and we’ll keep selling it things like iron ore — you know, used to makethings like missiles and submarines.

This budget also assumes China will not turn off our tap, which would instantly cripple us. After all, China buys 100 per cent of our nickel exports, 82 per cent of our iron ore, 77 per cent of our wool, 55 per cent of our processed food and 27 per cent of our coal.

What’s more, for all this talk of war there’s no urgent increase in spending in this budget on our defence, apart from more money for ASIO and cyber security.

Is China a threat or not? The budget seems confused. Picture: Getty Images

This budget expects us to hire just 1200 more military this year, but another 5000 public servants.

So is China a threat or not? Is war likely, or are we just being played in a game between two countries that actually need each other, given that two-thirds of the iron ore that China needs comes from Australia? We should be told.

That’s not the only part of our future this budget skates over.

Frydenberg says he wants to slash the unemployment rate to under 5 per cent so that demand for workers pushes up wages.

But at the same time, he wants immigration to roar back to the levels before the pandemic, to give the economy a boost.

Indeed, the budget assumes we’ll be importing 235,000 people a year just three years from now. Enough to fill a new Melbourne every two decades.

This is nuts. This is a Ponzi scheme, importing ever more immigrants to give the economy a sugar hit, until our cities are how big exactly? Triple the size? With triple the dams to water them?

We’ve already tried this scheme and seen what it really does to wages. For the past decade we ran one of the West’s biggest immigration intakes, pro rata, yet real wage growth kept falling. No wonder, when we’re importing so much competition for jobs.

Lazy, lazy, lazy.

And if we’re really going to import a couple of hundred thousand people a year from just the year after next — when the coronavirus will be a threat for years — why has this budget not devoted a single dollar to building new quarantine centres?

True, the government can’t spend this much money without also doing good.

But what kind of society is it building? What future does it plan? Or does this government see nothing at all past the next election?