The near-total lack of content in Josh Frydenberg’s budget update on Tuesday only drew attention to the hollowness of the government’s rhetoric on the “values and principles” that apparently guides the Coalition.
The government either hasn’t asked Treasury how large the biggest deficit since WWII is likely to be, or didn’t want to tell us. In any case, it might be time for new talking points.
“Encouraging personal responsibility and maximising personal choice” sits oddly with mandatory lockdowns and shutting thousands of businesses for six weeks. “Rewarding effort; and risk-taking” doesn’t gel with unleashing the biggest fiscal stimulus in the world and putting more than half the workforce on government welfare for six months.
On top of the 1.3 million on JobSeeker, there’s another 5.5 million on JobKeeper, the Treasurer said.
Let’s be frank, the past six weeks have killed for good the idea that we’re a nation of buccaneering larrikins. We must be the most risk-averse group of people in the world. Caution is laudable, but delusion is not.
“Our actions are designed to cushion the blow from the income shock,” Frydenberg said. Yet the boost to household income from the deluge of government payments far outweighs the loss in wages and salaries from jobs lost.
“We made real progress in fighting the virus, buying time to increase our health capacity,” the Treasurer said. And we haven’t risked using any of it: just 16 people were in intensive care yesterday as a result of coronavirus.
“The standout feature of the Treasurer’s economic statement was that it contained no new information,” Commonwealth Bank economist Gareth Aird told The Australian on Tuesday.
The speech was a political rather than economic document, a summary of the vast array of coronavirus talking points that added very little to the Reserve Bank’s appraisal of the economic outlook last week. The speech was a missed opportunity to rein in some of the largesse, or at least signal scope to do so should a more optimistic scenario play out.
“Australians know there is no money tree. What we borrow today, we must repay in the future,” the Treasurer said. Few believe in free lunches yet the policy establishment increasingly does, which explains the blase attitude to the extraordinary injection of freshly created money. The waste — money going to those who don’t on any reasonable criteria need it — will be unprecedented.
“The coronavirus has created a one-in-100-year event,” the Treasurer said. He was right on that, yet it’s not the virus but rather the response to it. It will be interesting to see whether the next pandemic is managed in the same way.
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