Labor’s mission to remake ‘old Australia’ will hurt us
If you wanted one word to sum up the budget the Treasurer handed down Tuesday night, it would be “audacious”. How else to describe a spending program that manages to simultaneously take dead aim at aspirational Australia while landing in the black off other people’s hard work? Because for all Labor’s selfbelief in its own economic press releases, Australia’s brief moment in the budget surplus sun can be put down as much to mining as sound management.
It would pain the left to admit it but to the extent the budget is a success story, it is fair to say that Gina Rinehart is as much its author as Jim Chalmers.
In his budget speech, the Treasurer only mentioned coal and gas to pat himself on the back for intervening in the domestic energy market.
And when it came to talking about the sectors that saved his budgetary bacon, he could only bring himself to mention the “high prices for the things we sell overseas”.
Well, indeed. Back in October, Labor built itself a huge amount of headroom for its 2023 budget, predicting that the price of thermal coal would have fallen to $88 a tonne by now. Just the opposite.
The message was clear: The mining sector might be one of the few parts of the economy still chugging ahead according to the most recent set of national accounts, but we don’t talk about it in polite company. Instead, it was all handouts to Australians on both ends of the spectrum, with hardworking middle Australia left to pick up the tab. At the heart of this budget is Labor’s program to remake “old Australia”, which is as much about overthrowing symbols like Australia Day and the monarchy as it is about blowing up the old postWhitlam settlement that encouraged individual achievement and wealth creation.
And the resources sector is only part of this re-engineering of society. There is no question that the nation’s housing situation is diabolical, particularly for young Australians trying to get into the market.
But what is the government doing about it? Making a concerted push to tip the scales away from home ownership and create a generation of locked-in renters who Labor hopes will be more likely to vote their way. Of course no one really believes the Treasurer’s promise that the government will build “one million new, well located homes” over the five years from 2024. Building approvals are as low as they were in 2012 and without steamrolling not only planning processes, but entire suburbs, it will never happen.
Jacinda Ardern tried a similar scheme in New Zealand and managed to get something like 500 dwellings to completion, and this is likely to shape up as a big broken promise if the government wins a second term and goes for a third.
But the message is still loud and clear. Just as with interventions in the energy market, which will involve not just targeted bill cuts but $40 billion in “investments” in clean energy, the government is showing its willingness to fiddle with other markets to achieve its aims to remake the country.
All the housing policies the Treasurer tipped Tuesday – a “housing accord”, tax breaks for corporate build-to-rent projects and more lending to community housing providers – are all designed to make leasing more attractive and individual property ownership less so.
There are plenty of other examples. Electric vehicle purchasers, most likely to be in Labor-Green-Teal inner city seats, get tax breaks and $800 million in support.
Small and medium size businesses the ones who might need to, say, buy a diesel ute or truck - will find they have lost their old ability to write off such purchases instantly.
And what is left out of all this is true economic reform and boosts to productivity.
It is absolutely fair to blame previous Coalition governments for dropping the ball in this regard, failing to raise per person GDP, and do more to get young people into homes they own rather than rent from big investors like industry super funds. But if Labor is going to sledge its predecessors, it has to show they are doing more than just handing out money and getting back to their own reforming roots.
Jim Chalmers has failed that test, and we will all be the poorer for it.