Why Australians shouldn’t give a damn that the budget is in balance | Greg Jericho | Business
So the budget is back in balance. Do you care? You don’t? Good, you shouldn’t.
This week the treasurer announced that the 2018-19 final budget outcome was a deficit of $690m and, because it is less than .01% of GDP, we can call it “balanced”.
It came about because of two things.Firstly, there was $10.5bn more in income tax revenue (individual and company) than was predicted in last year’s budget. The company tax revenue was 5% more than expected (praise be iron ore and coal prices going up!), while the individual income tax revenue was 3% above what was budgeted.
And on the other side of the ledger, there was $4.6bn less in spending on the NDIS than was budgeted.
The government would have you believe that this occurred because there is less demand for the NDIS than they expected, or, to use the language in the final budget papers, there has been “slower than expected transition of participants into the NDIS and lower utilisation of participants’ individual support packages”.
Budget papers can be tricky things to navigate, so let me decode this for you. It means “we’re massively behind schedule and people are not getting the money they need because of bottlenecks in the system”.
The Saturday Paper’s Rick Morton, who is an absolutely gun reporter on the NDIS, tweeted while Stuart Robert, the minister for the NDIS, was spouting these lines on Thursday, that “the demand is there for the NDIS, the NDIS is running 18 months behind schedule, so it is not meeting forecasts.”
The NDIS, like that other great acronym of government funding, the NBN, is yet another example of a LNP government taking on a Labor initiative and completely stuffing it up.
With the NBN at least there was the sense that there was some philosophical reasoning behind their desire to ensure it became a joke. The Liberal party, even under Tony Abbott, was never all that excited about the public sector doing something it thought could be offered worse and for more money by the private sector.
And thus – especially once Malcolm Turnbull got his hands on it – the government was determined to ensure the public sector could produce an even more woeful and disappointing telecommunication system than could the private sector.
The NDIS though really should be right in the Liberal party’s wheelhouse – it is essentially a privatising of the public health system by stealth.
To be frank, when Robert was appointed as the responsible minister by Scott Morrison after the election, it was a pretty loud signal that it was an afterthought in the government’s priorities. Robert is not someone you hear often paired with words like brilliant or success or competent.
But then this week we saw the LNP senator Eric Abetz stand up in parliament and suggest The Conversation was like Hitler, Stalin and Mao for announcing it would no longer publish comments that were clearly from climate change deniers.
Close to 99% of the climate change denialism practised by Kenny and his fellow travellers in the Liberal party and News Corp is asking why questions answered more than 20 years ago have not been answered.
Seriously, have these blokes never heard of Google?
Anyway, the point is that the LNP is rather overflowing with MPs and senators whose sole purpose appears to be to demonstrate that we do not live in a meritocracy.
For they surely have stuffed up the NDIS, even though it should be their chance to show off the glories of private enterprise.
Rather than having to apply directly for equipment or go through a public service provider, the NDIS is essentially a voucher system. You get assessed as needing a certain amount of money to meet your needs – whether that be for equipment or services such as a speech therapist (which my daughter has). And you go off and find and buy those services and products yourself and essentially bill the government. At least that is the theory.
In reality it can be a struggle to get that assessment, and then get a provider (it is not like the NDIS has suddenly produced a glut of people qualified to provide therapies and services for those with a disability).
In a lovely slice of bitter irony, the slow rollout of the NDIS has delivered the government its budget balance, while what spending there has been on the NDIS has essentially allowed the government to claim that it is keeping the economy growing.
In the past year, half of GDP growth came from increased consumption spending by the national government – and a massive chunk of that was for the NDIS. It is why national government spending accounts for more of overall consumption now than at any time since the second world war.
So we have weak economic growth bolstered by NDIS spending, and a lower than expected budget deficit due to an inability to roll out the NDIS as planned.
It doesn’t really make for anything to boast about.
Had the NDIS been rolled out as planned, the economy would actually have grown faster, but the deficit would have been nearly $5bn larger than it currently is.
And it would mean tens of thousands more people would be getting access to the NDIS than are now.
And that is why you really should not give a damn that the budget is in balance.
• Greg Jericho writes on economics for Guardian Australia