Today, Australia’s Reagan and Thatcher inspired Treasurer will deliver Australia’s FY21 budget. This notwithstanding that the financial year is already 4 months old.
There will be tax cuts but there will also be tonnes and tonnes of money thrown all over the place with questionable purpose and target. There will be silly allocations for magic infrastructure which will require not only future debt servicing but also future maintenance costs. From unnecessary school halls to unnecessary car parks to unnecessary light rails to unnecessary sporting facilities.
What there won’t be is serious supply side reform to allow the Australian economy to produce. There won’t be regulatory reform or general economic reform or a withdrawal of government from areas it does not belong. There will be plenty of sugar hits and not much more.
And all this spending will be paid for …. by our children and grand children. And this in a nation with an ageing population demanding insatiable levels of ‘free’ health care and government benefits to be paid for by an emerging workforce saddled with record levels of public and private debt (including HECS/HELP burdens), a tax, RBA and supply constraint policy induced lockout from the property market, high marginal tax rates and a compulsory extraction of (currently) 9.25% of the income to pay for the lifestyles of the superannuation industrial complex.
There may be a case for fiscal stimulus but just because the political zeitgeist does not require discipline does not mean that spending should be ill disciplined.
Somehow, and we all know how, there has crept into our economic discourse this nonsense that economies grow from spending and this requires the government to splash out. The economic luddites from the ABC to Nine Media to SkyNews will yabber on with advice to forget about savings and forget about your debt levels and go out and spend in the national interest. This demonstrates a complete lack of understanding of what drives an economy and prosperity, and well explains the economic sewer we are swimming in.
A happy society, a prosperous economy and low unemployment are not the objectives of good government. They are the byproduct of good government. But a focus group, a private poll and a lobbyist will never tell you this.
To suggest, as will likely be suggested in today’s budget, that the solution to our national economic ills will be found in having a spend-a-thon is as wrong as suggesting that we can solve our debt burden by getting into more debt.
When Peter Costello suggested that parents have that third child for the nation, hopefully it was not for a policy of breeding a generation of indentured workers who can’t leave the country.