Tony Walker writes in The Conversation (9.5.17) that Scott Morrison and Malcolm Turnbull have clearly resolved to move onto the offensive politically by bringing down a budget that is both populist and expansionary.
'Treasurer Scott Morrison has delivered a 2017-18 budget based on some heroic assumptions about a continued improvement in the international economy, and tethered firmly to concerns about the government’s own political vulnerability. In the process, Morrison has leapfrogged normal practice in the first budget after an election – traditionally an opportunity to tighten purse strings – by outlining free-spending government programs in health, education, housing affordability, assistance to seniors and a big down-payment on an ambitious suite of infrastructure projects.
'With its eyes firmly on a populist challenge from the right, the government has projected some tough measures to bring the larger banks to heel by instituting a series of reforms that will seek to answer those concerns. Banks will not be happy, nor will investors in those institutions whose share prices are likely to retreat once the impact of the proposed levy on profits is factored into market calculations.
'Beyond all that, Morrison’s budget speech could be read in part as an electioneering document, as if the next election was just around the corner instead of two years away. Theoretically, we are two budgets shy of the next election. But clearly Morrison and Prime Minister Malcolm Turnbull have resolved to move onto the offensive politically by bringing down a budget that is both populist and expansionary.
'This is a budget that could easily have been delivered by a Labor treasurer.'
Warm words in Morrison's budget barely disguise a story of fiscal failure
Stephen Koukoulas comments in The Guardian (10.5.17) that, judged by the promise set out in 2014 to balance the books, the Coalition has been a disaster. The author contends that Australia’s triple-A credit rating must be in jeopardy. Other commentators, including TJRF Board member, Karen Hussey, observe that Queensland has grounds for complaint out of Treasurer Morrison's 'short on vision' and 'Sydney-centric' budget.
'Three years ago, then-treasurer Joe Hockey delivered the first budget of the Abbott government. It was a classic austerity budget, designed to tackle the “debt and deficit disaster” and “fiscal emergency” that it had railed against in opposition. That budget saw a raft of spending cuts, user charges and tax increases as the government tried to fast-track the return to budget surplus.
'The effect of the policy changes in that budget saw the forecast for the 2016-17 deficit fall to $10.8bn, and then to a mere $2.8bn in 2017-18. There were budget surpluses forecast in 2018-19 and beyond. According to Hockey, the budget had effectively been fixed and the emergency thwarted. Or so it seemed.
'Over the intervening three years, the budget bottom line numbers have soured. This is despite the global economy registering solid, unbroken growth that has seen Australian export volumes grow substantially. Domestically, the economy has recorded average gross domestic product (GDP) growth at a reasonable rate, around 2.5% per annum over three years, despite the crash in mining investment and the volatility in commodity prices.
'Suffice to say, something has gone badly wrong with budget repair over the past three years.'