Federal budget finally brings purpose, and a plan, to Canberra

A decade of substandard government has been broken by the federal budget and Australia is now set for revolution.

Federal Treasurer Scott Morrison is congratulated after delivering the Federal budget. Picture: AAP.

I walked out of the budget lockup believing that for the first time in a decade we are starting to move Australia in the right way.

While there are three clear dangers on the horizon — local energy problems, risks in the housing market and the China-US situation — we should not let them obscure our underlying strengths. Our bankers will be deeply shocked at the attack on them but again we must not let that obscure the momentum and energy the Turnbull government is now creating.

I have covered the ability of first home buyers to use their superannuation for a dwelling deposit in a separate filing. In superannuation Morrison stood up to the vested interests in this area and did what I believe was right for the nation. That took courage but it also underlines the new era we are seeing in Canberra.

Australia has had almost a decade of substandard government, covering the final Howard years, the Rudd-Gillard fiasco and the Abbott-Turnbull games. Now suddenly the current government realises that they are likely to head to the opposition benches come the next election. So it is time to actually do something. They are now not frightened to adopt and modify traditional ALP policies.

And we have seen the government work out how to deal with the Senate. In particular they have won the allegiance of Nick Xenophon and his people by clamping down on gambling — an issue that Xenophon has deep passions about. In exchange he will support them in a number of areas.

Accordingly, we are seeing a revolution in health, education, agriculture, tourism and infrastructure and while we will not always agree with what the government has done, they are out there with a purpose and a plan. It was fascinating to note that buried in the budget papers was the revelation that the Gladstone three — the three LNG consortiums exporting from Gladstone — have agreed to provide gas to eastern Australia. We don’t know the terms but all three consortiums would have seen what has happened to the banks and know that similar medicine will be given to them should they try and play silly games.

It is going to be important for Australia to keep our migration up to speed and it was good to see Minister Dutton underline that we will maintain migration at 190,000 people. However he does need to amend the visa legislation to enable universities and those recruiting top executives and high technology people to recruit the talent they need from overseas.

As we all know the housing construction boom has enabled a relatively smooth transition from mining investment to housing. Now housing will decline and so infrastructure is going to be very important. But it may be delayed because the unions will play hard ball over the building code. But thanks to the code we are going to get much greater value for our infrastructure dollar. It will be worth the delays.

In addition, we should not forget the important events that are taking place in the US because they will affect the outcome of the budget. The budget papers assume relatively low growth in the US — in other words Trump’s “Make America great again” slogan will not have much of an effect in America. Maybe they are right but the passing of the Obamacare legislation clears the deck for the big tax cuts, while the problem with Korea makes the US very nervous about trade tariffs with China. But we need to be aware that the outcome of that situation will have a profound effect on the world and Australia.

Two footnotes:

• To Bendigo Bank chief Mike Hirst and all the CEO’s of the banks outside the top five: Scott Morrison and Mathias Cormann expect you to provide the competition that stops the banks charging depositors and borrowers in order to cover the bank excess profits tax. If you make the same or similar adjustments and don’t provide competition then I reckon you will cop the tax next year.
• To Scott Morrison: In the lock-up, Treasury officials were most helpful in explaining the way superannuation contributions would be mustered for home deposits. But, understandably, (no criticism) they had not yet worked out the finer details. I don’t believe they have the required detailed knowledge of the inner workings of big funds. You will need outside help for the finer details. Given my role in encouraging you to take this step I have people whom I think can help if you are having problems getting industry assistance. But once the big funds have stopped criticising you, they should give you the help you need.