Tell me this isn’t a Labor government: inflation spiking, taxes surging and spending blowouts on welfare. Tax and spend, all the way.
Jim Chalmers will more than halve the deficit this financial year to $36.9bn but faces a deteriorating budget bottom line in the years leading to the 2025 election as major revenue windfalls are gobbled up by spiralling spending programs and a slowing economy.
Remember the last time a Labor Treasurer swore that he was going to not just reduce the national debt but return it to surplus? That was Wayne Swan in 2011. Instead, by the time Labor were turfed out, debt had risen to 20% of GDP — closing in on $300bn. This, after the Howard government had left office, gifting Swan a $20bn surplus.
The budget will also reveal $548bn four-year spending on health and aged care, including $10bn in new measures aimed at strengthening hospitals and nursing homes.
While surging tax receipts are forecast to drive a total improvement to the bottom line of more than $42bn over the forward estimates, blowouts in health, aged-care, defence and the NDIS as well as a rising national debt bill will heap pressure on the budget over the medium term.
Higher commodity prices and $22bn worth of savings and reallocated funding will slash the underlying cash deficit for 2022-23 from $78bn to $36.9bn, but the accelerating structural spending over time means that Dr Chalmers will unveil higher deficits for 2024-25 and 2025-26.
So, Zippy will halve the deficit (ha!)… before driving it up again.
And he’s going to hit Australians with ever-soaring power bills.
Ahead of delivering his first budget, Dr Chalmers has identified electricity prices as the biggest driver of inflation, with government sources telling The Australian that the budget would forecast an increase in power bills of nearly 30 per cent next year.
The Australian
And it’s going to get a whole lot worse.
Prices in Australia’s $4.5bn carbon credit market could more than triple over the next decade amid demand from the nation’s largest emitters under Labor’s tougher safeguard mechanism.
“Carbon credits” are, stripping away the greenwashing, a tax on energy. That’s it. If taxes on energy are going to triple in a decade, who in their right mind is going to claim that that won’t send power bills — and everything else that relies on energy — soaring in tandem?
The operators of 215 large industrial facilities – contributing 28 per cent of Australia’s emissions – will be required to make reductions under Energy Minister Chris Bowen’s overhaul of the safeguard mechanism. The scheme is due to start in July 2023.
The Australian
It’s going to be a rinse’n’repeat of the Julia Gillard carbon tax disaster.
Still, at least the pockets of troughing “green” financiers are going to bulge, while the rest of us are eating our bugs in the cold and dark.
Tell me this isn’t a Labor government, indeed.
