Editorial: Budget bomb must be tackled, and soon

The accidental release of Treasury budget advice will put pressure back on Treasurer Jim Chalmers, writes the editor.

Treasurer Jim Chalmers is under pressure after an accidental department leak.

When federal Treasurer Jim Chalmers delivered his federal budget on March 25, it is fair to say he was probably more focused on the looming election than on budget repair. And fair enough.

It was just three days later that Prime Minister Anthony Albanese called the election for May 3. The budget Mr Chalmers did hand down – his fourth – included a $5 tax cut, a $150 energy bill rebate, and a boost to bulk-billing and the pharmaceutical benefits scheme.

It was not the cynical “everyone gets a prize” type of budget we have sadly gotten far too used in this country in recent times – witness the budget prior to the last state election – but it was designed to include sweeteners, while giving at least an impression of economic responsibility in tough times.

However it was a budget that did nothing to tackle the elephant in the room of Australian politics – the looming debt bomb. The budget papers had gross debt hitting $1.02 trillion (yes, trillion!) next financial year and reaching $1.22 trillion over the following three years, with interest payments alone hitting $28.1bn a year.

However, yesterday’s accidental release by Treasury of budget advice they had provided to create a more sustainable position put the pressure back on Mr Chalmers to address that overriding issue at the heart of his budget – that we are spending too much and not bringing in enough revenue.

It was a rare honest admission that just increasing productivity cannot fix all of our problems, and eventually some tough decisions will need to be made.

The document reveals that Mr Chalmers was warned he needed to find additional revenue and spending reductions to repair the budget.

Treasury advised that tax should be raised as part of broader tax reform and that improvements to the budget would need to come from economic growth, additional revenue and spending reductions.

Whether Treasury advice provided to the government should be made public as a matter of course is another debate.

But there is no doubt Mr Chalmers would have been embarrassed by the leak, not that he would admit it.

The simplest way to bring in more tax revenue would be to raise the rate of the GST.

With the current 10 per cent GST bringing in about $100bn a year, a 1 per cent increase would add another $10bn of revenue.

But while Mr Chalmers said he was happy to put everything on the table at next month’s economic reform roundtable, he seemed to rule out the idea of a GST hike, instead saying he would be looking at ways of simplifying the tax system.

But the budget is not a magic pudding, and if you’re not going to raise taxes you must cut spending – something that may prove to be difficult in coming years as our defence obligations increase, and the nation continues to age.

For his part, shadow treasurer Ted O’Brien used the document to go on the attack, saying: “Treasury is telling Labor what the Coalition has been saying all along – they have a spending problem, they lack fiscal discipline, and they are preparing to slug Australians with higher taxes.”

But that’s the problem. Governments need to be prepared to raise or introduce new taxes, and cut spending, or nothing will ever change. As voters, we need to be mature enough to accept that some tough decisions need to be made.

The reality is if we fail to fix our nation’s “debt bomb” it will simply explode, and future generations will need to clean up the mess. The Treasury leak makes it clear – it is high time Australia acted.

LET POLICE DO POLICING

Young men and women join the Queensland Police Service to help our community, to catch criminals and solve crimes, and to maybe have a bit of an adventure doing so.

So it must be terribly frustrating for them when they are diverted to ancillary tasks – transporting prisoners for example, or waiting in hospitals for hours so they can take statements.

As Acting Commissioner Shane Chelepy reveals today in an exclusive interview with police reporter Thomas Chamberlin, less than a third of the QPS workforce currently provides “a visible response in the community”.

Encouragingly, a 100-day review into the QPS will recommend a push for more frontline policing.

“What came through loud and clear (in the review) was the feeling of the workforce of the amount of functions that the organisation does,” Mr Chelepy said.

It is a frustration that is shared by a community thoroughly fed up with crime, particularly youth crime.

Changes recommended by the review include a scaling back of the executive leadership team, and giving frontline police in the regions more autonomy to make their own decisions.

Queenslanders want to see the police service performing at its optimum. We back them on this.

Responsibility for election comment is taken by Chris Jones, corner of Mayne Rd & Campbell St, Bowen Hills, Qld 4006. Printed and published by NEWSQUEENSLAND (ACN 009 661 778). Contact details here

Originally published as Editorial: Budget bomb must be tackled, and soon