THE SQUIZ

If you tuned into last night’s address by Treasurer Josh Frydenberg and you could see his lips moving but all you could hear was “re-elect the Coalition, re-elect the Coalition” over and over again, your ears weren’t playing tricks on you… He started his address by reminding us of how uncertain things are – war in Ukraine, the pandemic, floods. “But Australia remains resilient. Australians remain strong” – and we’ve “overcome the biggest economic shock since the Great Depression,” he said. Frydenberg sounded positive about the turnaround – there’s no watching underwear prices for him… And with that, he started spraying the moolah around in the hope of improving his side’s chances in the upcoming election. 

WHAT ARE THE MAIN POINTS?

The topline numbers: The Budget deficit is expected to be $78 billion in 2022/23 – that’s down from an expected $99 billion. And net debt is set to rise to $714.9 billion, down from an expected $835 billion. Our federal finances have improved. A lot. So the Coalition is taking the windfall to spend up on pre-election sweeteners like:

• “Responsible and temporary” cost of living measures. The Coalition will halve the petrol excise tax (aka by 22.1c) for the next 6 months, which should save someone who drives a medium-sized vehicle $10 a week. And there are cash payments and tax offsets for pensioners, welfare recipients and low/middle-income earners. 

• Some other favourite themes got some love. There’s almost $9 billion for cyber security and intelligence. New infrastructure projects get $17.9 billion as part of a $120 billion 10-year pipeline. And the health budget is a whopper – $132 billion next financial year. 
• And remember how The Nationals backed the commitment of net-zero emissions by 2050 in time for PM Scott Morrison to head to the climate change summit in Glasgow last year? It’s payback time… There are billions “to boost regional communities and industries”. 

SO WHERE TO FROM HERE? 

To an election campaign – maybe as soon as this weekend. But before we get there, expect a lot of talk about how the Coalition’s plan will land, economically speaking. Some are warning that pumping up the economy with all that spending risks higher inflation, and that would lead to interest rate increases coming sooner and faster than expected. The Commonwealth Bank suggests that interest rates could soon be 1.25%, compared to 0.1% today. And there’s a lot of talk about the projections for wages growth and inflation – the question is whether workers will actually be able to get ahead anytime soon. For Labor’s part, Treasury spokesman Jim Chalmers says the Morrison Government has delivered “a pretty desperate political ploy when the country needed a plan for the future.” Labor leader Anthony Albanese will deliver his response tomorrow night.