Eye on polls as cash splash keeps us happy

IN simple terms, $104bn has dropped miraculously from a bright blue fiscal sky into Treasurer Josh Frydenberg’s lap — and he’s promptly gone out and spent $96bn of it.

That’s why the total deficits projected over the four years out to 2023-24 have dropped only a tiny bit from the $456bn detailed in the December mid-year update to a still mammoth $447bn.

We are still on track to hit $1 trillion in net debt — and indeed, go rocketing straight through. The budget says the debt will reach $981bn by 2024-25, but as the budget will still be deep in deficit, we’ll go straight through the trillion the following year.

And just remember, those still-huge projected deficits and ever-rising debt are on the basis of “happy days are here again” optimistic assumptions about the economy, the budget, the virus and the vaccines.

And, “optimistic” about China. Yes, we might go to war with China, but they will still keep buying a billion tonnes of Pilbara iron ore every year, paying us — who knows — $50bn, $70bn, $100bn every year. Heck, they’ll still need our iron ore to make missiles.

Critically, all the numbers assume we’ll be heading back to a full-on 2019 pre-virus future from the middle of next year — with migrants and tourists once again pouring into Australia.

You’d have to say there’s a little uncertainty whether that will happen. Budget forecasts are a total crock at the best of times — right now they are a total and cruel fraud.

That $96bn being splashed around is locked in; indeed, it will certainly grow much bigger. We criticised Wayne Swan for not reining in the spending after the GFC eased; Frydenberg has set about “bettering” it.

I wrote a year ago that we will never again see a federal budget surplus. Last night made that a certainty.