Today, Treasurer Jim Chalmers belled the cat on the deteriorating state of the economy.
Iron ore prices are falling, which will worsen an already sizeable budget deficit this year.
Additionally, job growth is not what it was before, suggesting unemployment could rise, putting more pressure on the budget.
These realities are looming even before considering the gut punch that Donald Trump’s tariffs would mean for the Australian economy.
Meanwhile, the Prime Minister commented the other day that the elections will be in May.
Many commentators took this as a mistake and a clear sign that he will serve a full term, meaning we will have a final Labor budget before election day in April.
The government recently announced it would bring forward the budget when it published the calendar of next year’s parliamentary sessions.
But in reality, the Labor Party is keeping its options open. By advancing the budget you can have a budget and then an election.
Or he could rush to the polls in February or March and avoid having to approve a final budget, one that would reflect the worsening economic conditions that Jim Chalmers highlighted today. Including a massive deficit.
It is quite obvious that if the Labor Party believes it can win by going to the polls early and avoiding such a budget, it could do so.
Treasurer Jim Chalmers belled the cat on the worsening state of the economy Wednesday
Especially if you know there is no point in waiting for interest rates to fall, now that the RBA has hinted that might not happen until the second half of next year.
Ultimately, Albo will hold elections when he believes he is best positioned to win them, whether early or late.
While Chalmers has been forced to admit that he is losing control of his budget figures, that is unlikely to reduce electoral cheating.
The Labor Party demonstrated the other week that it is not above buying votes. The 20 per cent reduction in HECS debts, which cost $16 billion, was nothing short of a bribe. One designed to convince people to vote Labour.
Education Minister Jason Clare sold the announcement as having no impact on the budget.
That’s true, but just because our budget process has become a joke, it’s easy for the Treasurer to hide big-ticket items from his bottom line.
HECS is considered “out of budget”, as are many other big-ticket items.
The NBN portion of the investment is out of budget, as is the expensive Snowy Hydro 2.0 plan.
And you can bet that if Peter Dutton wins the next election and continues with his nuclear reactor policy, the cost of building them all will also be out of the budget. Billions of dollars more spent inexplicably.
In total, the off-budget items in which governments try to “pick winners” now cost taxpayers about $20 billion a year, according to economist Chris Richardson.
And that’s before you count the cost of things like HECS debt repayment.
Iron ore prices are falling, which will worsen an already sizeable budget deficit this year.
If we add to this the billions of dollars that must now go to pay the interest on our national debt (dead money before we can even think about starting to pay the trillion dollars of debt), the reasons we are in trouble economics become too evident.
But the problems don’t end there. Even within the limits of the budget, future projections are likely to underestimate the rising costs of schemes like the NDIS and overestimate Australia’s economic growth figures.
In other words, the deficit and accumulated debt may be even worse than they appear at first glance.
And in the midst of all this, the government is refusing to legislate the kind of broad tax and transfer reforms we need and that economists have long called for.