Budget 2021: No one left behind in battle for stronger economy

Scott Morrison and Josh Frydenberg, left, have sensed that debt no longer the concern it once was. Picture: Getty Images

If this budget doesn’t make the Morrison government more popular it’s hard to imagine what could.

Almost no group has been left out of the spending curve with the task of fiscal repair postponed for another decade and onto the shoulders of another generation of taxpayers.

It has a potential early election written all over it with the Treasurer ensuring no Australian was harmed in its construction.

Josh Frydenberg argues that there was no alternative budget and, as ironic as it may be, in spending big, the government has taken the cautious approach.

The new narrative is that while the economy is “roaring back to life” it could be easily snuffed out while the world remains in the grip of a pandemic.

Australia is not immune and the economy must remain on the fiscal drip until it fully recovers.

There will be hand-wringing among economists over the level of new spending — an extra $54bn in the space of just six months. In a non-crisis it would be eye watering.

Nevertheless, Labor will seek to portray Scott Morrison as throwing money around like electoral confetti under the cover of the pandemic.

But the politics still favour Morrison. He has used this budget, as he did the last, to increasingly stamp the Coalition’s authority over the social agenda in concert with the health and economic responses to the pandemic.

There are record levels of funding for the NDIS, aged care and mental health. This need for these investments should be uncontested and leaves the fundamental principles of the budget — a stronger economy rather than taxes underwriting better services — almost impossible for Anthony Albanese to attack, or outspend.

Frydenberg has also resisted the temptation to reinvent the wheel, in the belief that what has worked before will work again.

The successful programs and temporary policies of last year that got the economy back to where it is now have simply been continued — an extra year of tax cuts for low to middle income earners, tax breaks for small businesses, grants for home buyers, relief for pensioners, super breaks for retirees, a leg up for single parents and a women's statement promising greater economic security, health and safety.

Morrison and Frydenberg have also sensed the mood on debt. The national psychology has shifted since the Global Financial Crisis with debt no longer the concern it once was.

This has allowed the government to push the job of fiscal repair beyond the medium term. In other words, this budget makes no mention of when the nation may see another surplus other than to say we will still be in the red by 2032.

Frydenberg and Morrison are making the calculation that this is no longer a political danger.

At the same time they have sought to redefine the economic imperative as one of jobs over growth with an unemployment rate under 5 per cent appearing to replace GDP as the new standard for the economy and the future political contest.