Real reason behind Scott Morrison’s budget

Real reason behind Scott Morrison’s budget

When the Morrison government released the latest federal budget at the start of May, it was immediately clear to the nation’s political watchers that it was put together with an election in mind.

Many of the key demographics that the government is struggling with in the polls were carefully targeted. $3.4 billion was allocated to improve women’s safety, economic security, health and wellbeing.

Some of the biggest ticket items in what some have called the “Budget for Women” are:

• $1.7 billion to reduce childcare costs for second and subsequent children under the age five.

Removing the cap on childcare subsidies from July 2022

• $164.8 million for a trial program to help women escape family and domestic violence. The

program would provide victims with $1500 cash payments and extra funds for rental bonds, school fees and furniture.

• $129 million in legal assistance funding to help women access the justice system.

After the recent damning findings of the Royal Commission into Aged Care Quality and Safety, the nation’s seniors were also high on the government’s list of budget priorities.

The budget committed to an injection of $17.7 billion over five years to improve the aged care system, with an additional $6.5 billion allocated to providing Home Care packages for up to 80,000 elderly Australians.

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The nation’s prospective first home buyers were also heavily targeted in the budget, with multiple policies put forward to help them get into the property market.

The government’s New Home Guarantee (formerly known as the First Home Loan Deposit Scheme) will provide 10,000 more places in the program, for first home buyers to buy or build a new home with only a 5 per cent deposit.

Meanwhile, the government’s new Family Home Guarantee will allow up to 10,000 single parents with dependants to buy a home with as little as a 2% per cent deposit, provided they earn under $125,000 a year. Despite warnings from a wide range of property analysts and economists that these moves will only add further fuel to already rocketing property prices, they are nonetheless getting a big tick of political approval from the broader electorate.

But as the government attempts to regain political momentum after losing the past four Newspolls to Labor, many are wondering why the Prime Minister would take Australia to the polls this year, when they have almost another 12 months in office.

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It arguably comes down to one key issue, the economy.

As things currently stand, the economy is performing better than even the most wildly optimistic expectations. The Prime Minister is generally seen by the electorate as the leader that saved the nation from the coronavirus recession, that we still see decimating economies around the world on the nightly news.

But as Australia and the world heads into an uncertain future, defined by the largest withdrawal of government stimulus in history, things could drastically change by the time the Morrison government’s term comes to an end next May.

In the United States the positive economic surprises have come to an abrupt halt, despite $3.62 trillion ($2.8 trillion US dollars) in additional stimulus funding since the end of last year.

A number of different indicators have surprised to the downside of consensus estimates significantly, including jobs numbers, consumer confidence and retail sales.

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At the same time, US inflation figures have come in far hotter than analysts anticipated and there are already strong signs of inflation concerns dragging considerably on consumer confidence.

Rising costs for housing, cars and large durable goods purchases has seen consumer perceived buying conditions for these items plummet, in some cases to multi-decade lows.

Buying conditions for housing has suffered particularly badly, with conditions collapsing to the lowest level since January 1983, a time when US interest rates were 13.3 per cent.

Tarric Brooker is a freelance journalist and social commentator | @AvidCommentator

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