My Daily Advertiser column for this week
by ray goodlass
MYEFO a smoke and mirrors stunt to fool us
Last week Treasurer Josh Frydenberg presented the Mid-Year Economic Forecast Outlook (MYEFO) as being all good news, but closer analysis shows that most of us won’t benefit.
Indeed, though the forecast is that the budget is heading for surplus it is incredibly divorced from the reality of people’s lives.
It turns out that the prospect of a balanced budget comes from company tax revenue. It certainly didn’t come from workers’ taxes, given that wages have hardly risen at all over the past few years.
The boom in company tax revenue from higher prices for our iron ore and coal exports has enabled the government to forecast a budget surplus while promising more tax cuts, worth $9bn, over the next three years.
The big picture message the government hopes people will look at and not enquire further about is that the budget is now projected to be back in surplus in 2019-20 to the tune of $5bn (The Guardian Australia).
This good news will allow the government to introduce some pre-election sweeteners, without even having to wait for the budget next April.
So in what looks like the start of a five-month election campaign Scott Morrison has already earmarked a $10 billion pork barrel for “secret” tax cuts and spending promises.
That’s what the “decisions made but not announced” are worth in the MYEFO statement. And of course the likelihood of more election spending in the April budget.
Of course there are good reasons for governments keeping the details secret once such major decisions have been made. For example, there’s the possibility of insider trading if some people know what the new programs might be, noted The New Daily.
But to state the bleedin’ obvious, the details are being kept under wraps for purely political purposes, awaiting the chance to get the most publicity, hoping voters will remember the giveaways closer to the election. Perhaps also the government is keeping some powder dry just in case something turns up to warrant a March rather than May election. And of course there’s always the possibility of an unexpected ScoMo-style stunt from the PM.
Let’s hope not, given the sour taste many of us felt about some of those recent stunts, such as the Jerusalem announcement, the Big Blue Bus that the PM used only for photo opportunities, the integrity commission that is a clayton’s one worthy of Morrison’s pre-politics advertising career, and the way the next Governor-General was announced. Here’s hoping the PM resists his stunting urges.
However, all the suggestions of pork barrelling won’t hide the fact that the economic forecast to be experienced by most Australians is the poor wages growth outlook. Indeed, the interaction of our tax and transfer system (family benefits for example) means real take-home wages continue to fall, as wage rises are stuck around the inflation rate.
That is the reality most people are facing, and with that reality the government would need particularly cunning stunts to distract an electorate that quite rightly senses it’s not getting ahead.
Greens employment spokesperson Adam Bandt MP noted that pigs will fly before MYEFO wage growth forecasts come true.
He pointed out that this year’s MYEFO joins a string of 8 years of wage growth forecasts that have never happened.
“If history is anything to go by, we’ll see pigs at 35,000 feet before these wage growth forecasts come true,” said Mr Bandt. “We’re now in our 8th year of broken wage growth promises”.
Getting a budget surplus off the back of a $385.5 million cut to university research funding isn’t ‘good economic management’, it is vandalism, as Mr Bandt also noted.
This government, and previous Labor ones too for that matter, are committed to neoliberalism, but the premise of that economic philosophy is that it does not deliver decent wage rises.
We need parliament to legislate a floor under the minimum wage, restore cuts to penalty rates and recalibrate the economy so it serves working people.
“Working people are entitled to be sick and tired of this government, but there’s no guarantee that Labor will deliver either. If the market won’t deliver wages growth, the next government needs to implement policies to generate it” concluded Mr Bandt in a refreshing note of common sense.