Federal Budget Archives - thegoodwills.com

Australia’s most over-analysed Budget

We’d been out to dinner on Budget night, so turning on the TV later, I caught the last comment from Lee Sales: “That completes our first hour of this special Budget coverage.”

Budget analysis is a challenging topic for extended television viewing. The ABC borrowed David Speers from Insiders (wearing a blue suit and maroon socks), who took over to talk to a bank of television sets, splitting this up with breath-taking interludes (“Crossing now to Canberra for insights from…”).

It continued on Wednesday morning, while having my first coffee of the day with ABC Breakfast. Good television needs live action images and variety. I was bemused by the vox pops segment when a reporter went into the streets of Parramatta to interview everyday people. It was surely accidental than in the background a homeless person strayed into view, trundling a supermarket trolley, laden with the detritus of life on the streets. As Ralph McTell once famously sang:

“She’s no time for talking, she just keeps right on walking
Carrying her home, in two carrier bags…”

Such was the need for live footage, we had to endure repeated scenes of Prime Minister Scott Morrison and Treasurer Josh Frydenberg walking across a forecourt, huge umbrellas clashing in the wind as they sheltered from the rain. Around them, photographers, reporters and camera operators were likely making memos on their phones to claim laundry expenses. The pair stopped briefly and touched elbows (photo op) before going inside, leaving the media pack to pat dry their hair with tissues and soggy hankies.

Also in the live footage were scenes of Budget papers rolling off a printing press and being stacked in boxes.

Given that anybody with an internet connection can download the entire set of Budget papers at no cost, the printing of thousands of hard copies does seem like over-kill.

I asked a Treasury official: “How many copies were printed and what is the total cost?”

OFFICIAL

Hi Bob

Thanks for your enquiry.

We do not yet have final costs.

Media Unit -The Treasury

Now you see why journalists spend much of their time cultivating contacts who can find out stuff not yet made official.

Clearly I do not have such contacts (any more) but point you instead to this story, about the Canadian Government’s printing contract in 2017.

Despite a widespread move to the paperless bureaucracy, Finance Canada had committed more than $500,000 to print Budget documents. Opposition members were not impressed.

In 2015, I discovered a Choice Magazine survey of consumers’ household budget worries. At the time, rising electricity costs was the main preoccupation and it is still in the top three. The policy thrust by the Morrison government in 2020 is to push liquefied natural gas (LNG) as an energy alternative.

Although the solar panels on our roof cost around $7,000 to install, our power bills for the calender year so far total $33 and we are now in credit.

Those who made an investment in solar panels in 2015 would be enjoying similarly small power bills, more attractive feed-in tariffs and, five years on, closer to breaking-even on the capital cost of installation. Just saying.

The annual Choice householder survey update in June found that private insurance had replaced energy costs as the number one worry. Some 81% were concerned about the costs of health insurance – up from 75% 12 months ago.

Even in May 2019, long before COVID-19 disrupted the economy, Choice said 65% of people were “barely squeaking by” in terms of household finances.

The June 2020 survey found that private health insurance, fuel and electricity are the main worrying items for households, one in four of which are struggling to make ends meet.

A report from APRA shows a continuing trend for young people (20-49) to ditch private hospital cover because of premium costs.

A one-page item in Tuesday’s Budget will mean a lot to young people, families and people with disabilities. The Government has increased the age at which dependent children can be covered under a family PHI policy. From 1 April 2021, the Government will increase the maximum age of dependants for private health insurance policies from 24 to 31 and remove the age limit for dependants with a disability.

The aim is to encourage young people to continue with PHI when they reach the age of 31 (the age at which premiums for Lifetime Health Cover starts, if the customer has not had private health insurance prior to that date).

Locked up with Laurie, Kerry, Laura and the rest

Labor PM and Treasurer Paul Keating is credited with introducing both the budget ‘lockup’ and Budget night’s televised speech in 1984. I have worked on several Budget lockups over the years. Journalists from all over the country congregate in a (large) locked room within Parliament House.

At 2pm, Treasury officials distribute Budget documents to scribes, who then have time to analyse the key points and prepare stories for the next day’s edition (and post-Budget analysis for TV and radio). Scribes keep on filing updates until their publication deadlines and then adjourn to the bar or a late-night restaurant.

The real Budget stories often surface weeks after the documents have been made public. Business scribes in particular enjoy input from sources in the accounting profession: “Cracker yarn there, Bobby, Budget Paper 4 page 97, 7.1”.

As members of Australia’s rapidly ageing over-70s cohort, we were mild amused to find we are yet again to be stimulated by ScoMo. We were already the recipients of two payments of $750 (each) and now are to receive $250 in December and again in March 2021.

“Crivens”, as my Dad would say (informal Scottish dialect for an expression of surprise).

This money has already been earmarked for the little luxuries one struggles to find within the constraints of a fixed income budget. In my case that may well be a year’s supply of guitar strings, a new set of harmonicas and an ocarina (don’t ask). It may be wiser to put both payments towards a return flight to NZ to visit whanua, when allowed to do so.

As usual, individuals will scrutinise only the parts of the Budget that directly affect them: welfare payments, tax cuts, low-income tax offsets, Job Maker etc.

But if, as the Choice survey highlighted, 65% of households are ‘barely squeaking by’, I can’t see the government’s wage subsidy plan will do much to alleviate those concerns. The Job Maker scheme offers employers $200 a week for every under-30 worker they employ (minimum 20 hours a week). It will also pay $100 a week for employees aged 30-35. The government says this will create 450,00 jobs, whereas Labor says 968,000 unemployed people over 35 will miss out completely.

It remains to be seen if this wage subsidy scheme will be rorted by employers, as has happened with such initiatives over the years. The usual outcome of such incentives is that employers sack people hired under the subsidy scheme once it lapses. (Not to mention the possibility that over 35s will find themselves out of a job that has then been offered to a worker who attracts a subsidy. Ed)

But hey, I’ve already received $1500 and now promised $500 more from ScoMo for doing sweet bugger all. So I should shut up now, eh?

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The budget that forgot climate change

climate-change-power-station — power station image by Benita Welter from Pixabay

‘The budget that forgot climate change’ may be a slightly misleading headline, even though Greens Leader Richard Di Natale essentially said as much when interviewed on 2GB. He was elaborating on a press release issued on Budget night which castigated the Federal Coalition for virtually ignoring climate change.

“(Treasurer) Josh Frydenberg said in his speech that we owe our children budget discipline,” Di Natale said. We owe our children a plan for their future, and that should mean tackling climate change through a managed transition away from fossil fuels to a clean, green, jobs-rich renewable economy. By any measure this budget fails to do that.”

The Australian Youth Climate Coalition (AYCC) was blunter still, describing it as a “nightmare” budget.

“Scott Morrison’s government has given us budget that sets more money aside for a ring road in Cairns than for dealing with climate change – the biggest social and environmental crisis facing our generation,” the AYCC said.

“The LNP intends to set aside just $189 million over the next four years to deliver their so-called climate action plan – which, by the way, fails to so much as mention a transition away from coal and gas”.

To be fair, climate change did get two mentions in a Budget loaded with tax cuts to woo the nation’s middle-income earners (and an ‘oops we forgot the poor people’ moment, when the energy supplement was later extended to include NewStart recipients).

You know the old adage about shutting the barn door after the horse has bolted? The Coalition’s idea of dealing with climate change is to create a $3.9 billion Emergency Response Fund which will be used to mop up after severe storms, floods, bushfires and cyclones. The fund will grow to $5 billion over the next decade, the Treasurer said.

The Australian Financial Review’s Queensland Bureau chief Mark Ludlow outlined where the government had found the money for the Emergency Response Fund.

“The fund, which will need to be passed in legislation, will be created from the leftover allocations from the former Labor government’s Education Investment Fund as well as money that had previously been allocated to the National Disability Insurance Scheme which is no longer needed.”

One ought to mention, as Ludlow did, the government already picks up the tab for post-disaster funding under the existing Natural Disaster Relief and Recovery Arrangements. The NDRRA comes into play once State or Territory funding has been exhausted.

More promisingly, the government announced a $3.9 billion Future Drought Fund, which at least acknowledges that Australia needs to plan on the assumption that drought will continue to plague the outback, if not the entire eastern seaboard.

The Climate Council took to Twitter on Budget night to spell out its disappointment.

“The divide between the parties when it comes to Coalition’s focus on tax and surpluses, and Labor’s focus on climate policy, might come down to this: would you rather leave your children with a smaller federal debt or a worldwide climate crisis.”

The tweet was linked to a University of Melbourne Budget analysis which said Australia was not on track to meet its Paris Climate commitment of a 26% to 28% reduction in emissions off 2005 levels.

“We are projected to achieve a 7% reduction, and the budget on Tuesday night offered little to suggest we can change course.”

The Climate Action Tracker (CAT) rates Australia’s position on climate change as “insufficient”, which is the same rating given in 2011. CAT is an independent scientific analysis produced by three research organisations tracking climate action since 2009. CAT tracks progress towards the globally agreed aim of holding warming well below 2°C, and pursuing efforts to limit warming to 1.5°C.

The Climate Action Tracker’s latest verdict (December 2018) notes that Australia’s climate policy has further deteriorated in the past year, “as it focusses on propping up the coal industry and ditches efforts to reduce emissions”.

“The Federal government is ignoring the record uptake of solar PV and storage and other climate action at State level.

“The Australian government has turned its back on global climate action by dismissing the findings of the IPCC Special Report on Global Warming of 1.5°C and announcing it would no longer provide funds to the Green Climate Fund (GCF).”

The 2019 Budget confirmed that Australia’s contributions to the UN’s major fund would end in December, with a final contribution of $19.2 million. Australia has given $187 million to the fund, which finances developing world projects that cut emissions or promote resilience to climate impacts.

You may recall when John Howard belatedly made a pre-election commitment in 2007 to establishing a national Emissions Trading Scheme, starting no later than 2012.

Dubbed the Climate Change Fund, it promised that revenue from emissions trading was to be re-invested into climate change initiatives.oward made

I mention this only to point out that Tuesday’s announcement was just a rebadged Climate Change Fund – a new name for the same objectives.

The Morrison Government pre-committed $2 billion to the ‘Climate Solutions Fund’, which aims to reduce greenhouse gas emissions across the economy. It does so by (continuing) to purchase low-cost abatement through the existing Emissions Reduction Fund. Already there are claims that the government plans to use ‘Kyoto carryover credits’ to reduce our greenhouse gas pollution, even though comparable countries have ruled out doing this.

Ah well, at least we signed up for the Paris agreement, well after incoming Prime Minister Kevin Rudd honoured a pre-election promise and ratified the Kyoto protocol in 2007.

Some 195 member countries including Australia agreed to the Paris agreement in late 2015. The agreement’s long-term goal is to keep the increase in global average temperature to well below 2 °C above pre-industrial levels, and to limit the increase to 1.5 °C.

So it has been a long journey from the first Australian greenhouse gas emissions reduction proposal 30 years ago. In 1989, Senator Graham Richardson, who must have had an inkling of what lay ahead, made a Cabinet submission for a 20% reduction in 1988 Australian greenhouse gas emissions levels by 2005.

So what does the future hold after the budget that forgot climate change, some six weeks out from a crucial Federal election where the Opposition Labor Party offers a mixed bag of policies, including a big commitment to renewable energy and climate change mitigation?

A book delivered to my mailbox yesterday delivers an unpalatable verdict. Author Anna Skarbik says Australia can be a carbon-neutral country by 2050 – “if we just get on with it”.

Skarbik is a contributor to Advancing Australia – ideas for a better country, just published by The Conversation through Melbourne University Press.

She states that the Federal Coalition’s current emissions reduction target of 26% to 28% by 2030 is not enough to meet the zero target by 2050. Federal Labor will also have to boost its promise of a 45% reduction in carbon emissions to meet this target.

“Australia would need to cut emissions by 55% below 2005 levels by 2030 to get there without undue economic disruption,” Skarbik wrote.

As she observes: “Lack of consensus on climate policy over the last two decades has cost us dearly.”

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Y dig up coal? Maleny’s contribution to the Stop Adani campaign: