Will the coming budget bring relief or more pain?

By Joe Montero

Prime Minister Anthony Albanese has flagged that a tough budget is on the 25 October. He has also said that there will be some moves to soften the impact of the rising cost of living. Exactly what these are is extremely important. All we can go by is the record to date.

There is something else. This is the apparent contradiction between the objectives of making tough decisions and looking after people. Australia’s experience has been when politicians talk about a tough budget there is going to be cuts to services and the average punter is going to pay a price. Is this what Anthony Albanese what’s ticking in his mind?

So far, the track record is that the new government’s economic direction is not too different from Morrison governments. This is the stark reality. It’s not at odds with the neoliberal tradition of market mechanism solutions, through passing state functions to the private sector and government generosity to the big investor. This, it is held, is the way to encourage investment, to create growth and jobs.

One should not be too optimistic about this. The application of this during most of the last four decades has proved to be a resounding failure. It has been instrumental in getting us where we are now.

The economic ideology embraced by the Albanese government is made clear by its willing continuation of the Morrison stage three tax cut of $243 billion over the next decade for the wealthiest Australian.

Almost at the same time as Albanese’s speech launching a report form Suicide Prevention Australia, where he referred to the coming budget, the Reserve Bank of Australia lifted its interest rate to 2.35. Inflation is on the rise. The combination of higher interest rates and inflation means that the economy has entered into greater turmoil.

Why this is happening is not the here, except as indicators of more substantial underlying forces requiring urgent attention.

The greatest contradiction is between carrying on business as usual and softening the impact on the cost of living. One or the other must be compromised because you can’t look after the big end of town and look after everyone else at the same time. Something’s got to give.

This is where there is a difference between the Morrison and Albanese governments. The Morrison style was to crash through on the business-as-usual side. The Albanese style is to compromise provide a few offerings to everyone else, while still trying to maintain the same course. These offerings include a promise to lower the cost of medicines, provide small increases to pensions and JobSeeker payments, spending a little more on childcare, and work on the gender pay gap.

All of this and more is badly needed and go some way to ease the pressure of the rising cost of living. But they do not fix the problem. Australians will remain under increasing financial pressure.

Maybe scrapping of the tax cut should be scrapped to provide the funds to ease the pressure by creating new real jobs and dealing with the cost of housing.

 

A budget, especially in the conditions Australia is facing should not be about pruning of services or delaying necessary changes. It should be about setting new priorities. These priorities should revolve around an equitable share of the burden and lifting the capacity of the majority to function better in the economy. There is no way around the principal that the richest should shoulder a greater share of the burden and the poorest the least. Insisting that the greatest priority is make life better for the wealthiest investors puts it the wrong way around. This is not just about fairness. This has not led to an investor led recovery and it won’t in the future.

Unless the Albanese government gets off this path, it will repeat the failure of the Morrison government.

No one should be complacent. This is a time to raise voices to call for an alternative. One that truly puts the Australian people in the first place. This can only mean agreement on new priorities that answer the fundamental needs of Australian society.

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