At the national papers, The Australian and The Australian Financial Review, the best commentary was underpinned by the papers’ views about what is good for the economy. Both align with their readers by backing economic growth, business investment, more efficient taxation and low inflation. The editors know a rising economic tide that floats all boats is the best way to lift the poor and unemployed.
At the ABC, Guardian Australian and the Nine city papers, more space was, as usual, given to demands for ever larger spending on welfare. Like many look-at-me comments by reporters on social media, journalists of the Left are keen on parading their good hearts but less interested in hard heads. Their readers seem to share the approach.
Most news sources linked last week’s budget surplus to former Labor Treasurer and PM Paul Keating, the last ALP Treasurer to produce a surplus and the last hard-headed Labor Treasurer. Incumbent Jim Chalmers, who wrote a PhD on Keating, has now flagged a $4bn surplus, the first by any treasurer since Liberal Peter Costello’s 10 surpluses.
Some left-wing commentators claimed even before the budget that a surplus would help Labor overturn the electorate’s perception of Coalition governments as better economic managers.
David Lipson led the early running on this idea on ABC AM on Tuesday, interviewing Opposition Treasury spokesman Angus Taylor.
Taylor would have none of it and insisted “a drover’s dog” could have delivered a surplus. RN Breakfast host Patricia Karvelas picked up the “better economic managers” line only minutes later, interviewing Coalition immigration spokesman Dan Tehan. It was all pretty silly.
Yet next morning ABC 7.30 political editor Laura Tingle and The Age and The Sydney Morning Herald political editor Peter Hartcher were both suggesting the surplus could allow Labor to steal the Coalition’s economic mantle. To be fair, Tingle, whose piece also ran in the AFR, was more sceptical than Hartcher, who claimed in his first sentence: “Labor is making a grab to take the Holy Grail of Australian politics away from the Liberal Party.”
The trouble with that argument is that Chalmers really did stumble on a surplus thanks to burgeoning tax revenues that would have flowed which ever party was in government.
Still, Chalmers is right that all the surplus went to paying down debt and reducing the government’s interest bill, one of the fastest-growing spending lines.
Yet the restraint was overstated. Most media let him get away with claiming his was the fastest budget consolidation in history. Wrong. As AFR political editor Phil Coorey explained on Wednesday, that honour goes to former Liberal treasurer Josh Frydenberg with a $102bn turnaround in one year to 2021-22. Chalmers is forecasting a $126bn turnaround over three years.
Just as Keating wanted to ensure that Labor in the 1980s be seen as more responsible than the previous Whitlam Labor government, Chalmers and PM Anthony Albanese want to distance themselves from the big-spending Rudd-Gillard-Rudd Labor governments.
Yet it was not just budget surpluses for Keating. Unlike the Greens and modern ABC journalists, for whom campaigning on higher welfare payments has become an article of faith, Keating always said the best form of welfare was a job. He wanted budget repair – and micro-economic reforms that opened up our cosseted economy – to set the nation up for what turned into 30 years of uninterrupted growth.
It was no political parlour game but a plan to modernise the economy. That was why he and former Prime Minister Bob Hawke in 1985 lowered the top tax rate from 61 to 49 per cent and lowered the intermediate rate from 46 to 40 per cent.
Keating later reduced company taxes twice – from 49 to 39 per cent in 1988 and down to 33 per cent in 1993. The subsequent boost in national productivity from tax reform kept Australia out of recession for three decades.
This is why Labor should stick with the stage three tax cuts it backed before last year’s election. Let the Greens and the ABC bleat all they like but no government has ever taxed the nation to prosperity.
Yet some of the serious media’s criticism of Chalmers was also naive. His boost to unemployment benefits, his help for working single mums and rental assistance for those most in need were the bare minimum a Labor government could offer, given the promises of the 2022 election.
And some of the criticism by market economists, especially of Chalmers’ support for household power bills, is simply wrong. No friend of welfare or of Labor governments, Terry McCrann in the News Corp papers was correct on Thursday morning when he argued there was no evidence the budget would be inflationary, even if the Reserve Bank was forced to keep lifting interest rates.
Yet that does not mean Chalmers’ strategy is beyond reproach. Jacob Greber in the AFR on Wednesday pointed to a central spending problem.
Apart from emergency spending measures during the pandemic, the Coalition had managed “to ensure spending growth was slower than overall economic growth”. Payments had fallen from 25.4 per cent of GDP in 2013-14 to 24.6 per cent in 2018-19.
Under Labor this “grinds higher from 24.8 per cent in 2022-23 to 26.5 per cent in 2023-24 and 26.8 per cent” the following year, Greber wrote.
“Bear in mind that Labor’s spending number does not include the near $50 billion the new government is borrowing for special ‘off-budget’ investment funds to build energy transmission, housing and the NBN,” he added.
In The Australian on Wednesday, Paul Kelly put the spending issue succinctly: “This also reflects a different nation – spending is moving on to a higher plateau.”
Also concerning, as this column noted on April 23, is the forecast budget reduction over the next decade of $74bn in the spiralling cost of the National Disability Insurance Scheme. While the ABC loves trotting out disability advocates every time the issue is raised, the truth is NDIS spending was on course to treble spending on the AUKUS submarines project by mid-century.
NDIS Minister Bill Shorten has signalled an intention to limit spending growth to 8 per cent a year, but nothing has changed in substance.
This column is also concerned Chalmers’ $11.3bn decision to lift aged care workers’ wages by 15 per cent at taxpayers’ expense signals a dangerous intrusion by governments into the private sector. As the childcare sector shows, federal support for parents always feeds into higher charges in childcare and more profit for private providers. While welcoming the pay rise, several industry experts told The Ageing Agenda website some providers would simply divert the extra money to their own bottom lines.
The government’s clean energy plans, aversion to fossil fuels and hefty boost to migration over the next two years are certain to push up power prices and exacerbate the housing shortage.
ABC commentators and the Nine newspapers’ chief political correspondent David Crowe tut-tutted at the migration comments by Opposition Leader Peter Dutton in his budget reply on Thursday, showing they’re not listening to what is being said in the community. Of course this will put extra pressure on an already crowded and overpriced housing markets.
More Coverage
Pro-Israel lobbyists fail in contempt bid over Lattouf case
A group of pro-Israel lobbyists who campaigned for Antoinette Lattouf’s dismissal from the ABC have failed in their bid to have the Nine newspapers prosecuted for contempt of court.
ABC’s frequent flyer: Chairman’s booming travel bill revealed
Kim Williams spent almost eight times as much in his first 14 months in the top job as his predecessor Ita Buttrose did in over two-and-a-half years, it has emerged.
The federal budget editions of the major newspapers and websites on Wednesday told readers a lot about how editors see their markets.