What could be more exhilarating than the moment the Federal Budget is handed down?! Perhaps only a game of test cricket, a broken Wi-Fi router and every inconvenience the world contains, including gluten-free toast without butter and the movie, Aloha.
Of course, I’m being a silly. The budget is of meaning to many, which explains the glut of annual articles headed: What Does The Budget Mean For Me?
As everyone and their fiscal poodle has already prepared such an item, I won’t trouble you with another. Today, I wanted to wail more widely about your place in the national economy, which imposes itself on you not just in May, but every day of your darn life. I promise to try to add delicious butter to this broad description.
I will, however, particularly address those of you in receipt of welfare payments who may be subject to the expensive, invasive indignity of drug-testing should you wish to retain your poverty. Send me an email. We will plan to meet in Canberra where together we will hold our urine jars aloft and demand that every politician of our nanny state fills them as we watch, because, surely, they were altered when they thought of this one. We will withhold our bodily fluids until these are also extracted from every single CEO and finance sector exec in receipt of an annual bonus. Those whose race for concentrated profit does far more harm to the state than folks living on a couple of hundred a week must release their wee.
Today, I wanted to wail more widely about your place in the national economy, which imposes itself on you not just in May, but every day of your darn life.
(Random testing must also become compulsory for every citizen who owns an investment property. I have rented all my adult life, and I conclude that many of my landlords have been off-their-faces when they’ve insisted that inoperable windows, broken flyscreens and early colonial plumbing that exudes the smell of death are all part of the “charm” of living in a “quirky” rental. The future cost of my illness to the state could be avoided if only government withheld generous tax concessions to drunk landlords. And real estate agents, who must also be self-medicated when they use the word “original” in property ads, when what they really meant was “slum”.)
The budget can make an immediate difference, good or bad, to particular groups of people. But it also has another more important function, which is that of propaganda. A government makes what amounts to an annual advertisement for itself. This is not just true of Coalition governments; the ALP has certainly been in the business of branding itself, too.
There’s those little moments of positioning, such as the drug-test measure. The Coalition is saying “we’re tough on people”. But the big thing governments are now inclined to do with their annual statement is say “we’re tough on debt”.
The budget can make an immediate difference, good or bad, to particular groups of people. But it also has another more important function, which is that of propaganda.
Many people are convinced that a budget deficit—that’s when the government has spent more than it has saved—is a bad thing. Politicians often say that future generations will be left with debt, and that we must save at all costs. Which sounds convincing. It is, however, a pretty shaky claim.
To make their point seem valid, politicians compare the federal budget to a household one. They say you don’t spend more than you have and expect to do well in a household, ergo, nor should we in government. I have heard Treasurer Scott Morrison resort to this flawed explanation in recent days. Leaving aside the fact that Australian household debt is, in fact, at critical levels—and, no, this is not largely because greedy people are buying fancy stuff, but because workers’ wages are not keeping pace with the cost of staying alive—let’s think about the household debt analogy.
My household, for example, brings in just south of 60K a year. I am a casual employee, so sometimes this is more, and sometimes this is less. When it is less, I can tighten my belt. Helen has less and she buys less. (Or Helen pretends that one day she can pay off her Visa bill.) Simple.
The relationship between income and expenses is very different for a national economy.
Leaving aside the fact that Australian household debt is, in fact, at critical levels—and, no, this is not largely because greedy people are buying fancy stuff, but because workers’ wages are not keeping pace with the cost of staying alive—let’s think about the household debt analogy.
First, say a large Australian company goes out of business and lays off workers. Government income from tax is reduced. But, unlike Helen, the government can’t simply take extreme saving measures without serious future consequences. I don’t eat for three weeks, fine. I might finally fit into my size eight trousers. But if government cuts off, or reduces or stagnates, unemployment benefits to the sacked workers and we all don’t eat, that’s a real problem. These people are not buying anything. Government revenue in the form of tax goes down.
Second, this saving, also often called “austerity”, creates problems which are expensive to fix and hazardous to ignore. People suffer mental and physical health problems. People get bored and angry. Some people start setting Pepe the Frog as their Facebook profile picture. No one wants that. People become deeply alienated and less likely and less able to secure expensive training and education. We have a nation of disaffected frogs in the future who have no skill other than writing rude things on the internet, therefore fewer people to provide tax revenue to the government. Austerity sounds like a good, belt-tightening exercise. It simply does not work.
It is not just that the government can currently afford to spend more, it must spend more to avoid intergenerational frog issues.
I apologise to those of you who found this brief deficit summary insufficiently buttery. I also apologise to those of you who found that it did not contain enough substantial bread. I ask all of you to think about the bread-and-butter of our national economy, however, so that we can truly engage in annual budget talk with an informed appetite.