Federal Budget 2024: Ben Harvey skewers the tax cuts and electricity credits set to prime inflation

Ben Harvey
The Nightly
4 Min Read
Ben Harvey translates what the Treasurer said - and what he actually meant.
Ben Harvey translates what the Treasurer said - and what he actually meant. Credit: The Nightly

Budget speeches are always riddled with fanciful crap but even Enid Blyton would blush at this one.

Tax cuts for all workers, electricity credits for every homeowner and more than a million new homes to be built by tradies that don’t exist.

All that was missing was lashings of ginger beer and ham sandwiches, yet we’re expected to believe that none of this largesse is inflationary?

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How could anyone with a passing understanding of economics keep a straight face when prefacing the words “a tax cut for every taxpayer” with “responsible relief that directly reduces inflation”?

This would have been a superb Budget if Australia was in recession.

We are not. We are about to pump-prime an economy that is full to bursting.

Chalmers’ pledge to have the CPI back at 2.75 by Christmas risks being cruelled by his addiction to spending. He’s never seen an expenditure line item he didn’t like the look of.

It’s why this year’s projected puny surplus is followed by years of deficits.

He has sheeted blame for this imminent sea of red ink to “unavoidable costs”.

Chalmers has a warped view of what is mission-critical.

Some “unavoidable costs” taxpayers will incur in the next few years include “$5.2 million to support the financial sustainability of the Canberra and Darwin symphony orchestras” and “$1.5 million over two years to improve existing arrangements for the accurate and clear labelling of plant-based alternative protein products”.

Page 102 of Budget Paper No. 2 reveals we are on the hook for $20.7 million for “Australia-France enhanced relations”.

Really? More than $20 million on croissant diplomacy to soothe Emmanuel Macron’s ego after we opted for nuclear subs instead of his diesel clunkers?

A few million here and there is rats and mice in the scheme of things but anyone who has run a household budget knows that if you look after the pennies the pounds look after themselves.

Bugger all pennies were pinched in this Budget.

The lie of financial prudence is exposed on page 16 of Chalmers’ speech when he said “we’ve found $27.9 billion in savings and reprioritisations”.

Context effortlessly skewers this achievement. The 2024-25 Budget is $734.5 billion. That’s how much it will cost to run Australia next financial year.

The $27.9 billion in spending through which Chalmers has run a red line represents less than four per cent of total expenditure and it appears that a lot of those savings came from re-arranging the deck chairs in the Department of Defence.

Is shaving less than $28 billion from a Budget of close to three-quarters of a trillion worth any back-slapping?

Please.

The self-congratulations continued five paragraphs later when the Treasurer claimed “we’ve achieved all of this despite much smaller revenue upgrades”.

“Revenue upgrade” is code for “tax windfall”.

Chalmers had the audacity to expect a high five for (fleetingly) getting into the black on the back of a smaller windfall than his predecessors enjoyed.

Would you consider yourself a good manager of your household finances if you managed to pay all the bills only because of a Lotto win?

What if the Treasury had more accurately predicted commodity prices? The answer is more red ink arriving much earlier.

The deception about uncontrolled spending is nothing compared to other blatant piss-takes.

More than a million new homes? Seriously?

Who is going to build them?

Certainly not the apprentices that we are encouraging into TAFEs now. They’ll be a liability to their employer for the next two years so will only help achieve Chalmers’ goal in the third year of the five-year housing plan.

Inflation at 2.75 per cent by Christmas?

Should we believe Australian Treasury officials (who have consistently been unable to predict the price of oil and iron ore) over their contemporaries at the IMF, OECD and RBA, who all say it’s a pipe dream?

The $50 billion investment in defence is good for the economy?

Sorry to tell you, Jim, but building ships and tanks doesn’t create wealth. If it did North Korea would be the richest country on earth.

Debt is somehow manageable now that it’s “just” $900 billion in 2023-24 instead of the $1 trillion that was forecast?

That’s like being happy that your house is only 90 per cent burnt down when it could have been completely razed.

Gross debt will be back over $1 trillion by 2026, anyway, and at a heady $1.1 trillion two years after that.

In both absolute terms and percentage of GDP, this Budget leaves Australia in more debt than ever before.

The legacy of living beyond our means through yet another Budget cycle is $35.6 billion a year in interest payments.

That’s a record (again, in both absolute terms and percentage of GDP) and equal to four times the annual Home Affairs budget.

By 2028 we will spend four times more servicing our IOUs than we will protecting our borders.

Perhaps that’s what Chalmers meant when he said at the start of his speech that this is “a Budget for decades to come”.

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