You know all the headlines on Monday about tonight’s federal budget delivering $10 billion in transport infrastructure? It looks like a lie.
By Micheal Pascoe
I’m happy to be proven wrong, but it seems Treasurer Josh Frydenberg is indulging in some more double or triple counting to garner the uniform favourable media coverage this latest stunt achieved.
At no point in the government’s standard media management on Sunday night did the Treasurer claim the $10 billion over 10 years for roads and such was extra money.
Given the government’s form, odds are Mr Frydenberg is re-announcing one of his announcements in last year’s budget.
The aforementioned form is that any announcement worth announcing is worth announcing several times. Much, if not most, of the media can be trusted to treat it as news every time.
A quick recap
In his October COVID-19 crisis budget, Mr Frydenberg announced the government was increasing the federal transport infrastructure pledge from 2019’s $100 billion over 10 years to $110 billion over 10 years.
Yes, an extra $1 billion a year – hardly a startling increase given the economy’s fear and loathing back in October.
In the context of total Commonwealth expenditure of some $600 billion in a $2 trillion economy, it’s technically “stuff all”.
And now there’s suddenly detail about how $10 billion over 10 years will be spent. It looks suspiciously like this is the same “extra” $10 billion that was announced last year without any projects to pin it to.
Again, I hope I’m wrong – I would like to think all of Australia’s media wasn’t such a pushover as to swallow such a PR stunt.
Well, at least those headline-grabbing road projects are an improvement on the first two examples Mr Frydenberg gave for transport infrastructure spending in his last budget speech – the Bolivia Hill upgrade and the Singleton bypass.
The Bolivia Hill upgrade has had more government announcements than Bolivia has had presidents – and it has had plenty.
The local member, Barnaby Joyce, was hot to trot just about the call for tenders in 2017 and many times since, including the obligatory hardhat-and-shovel shot in 2018.
Throw Bolivia Hill announcements by Nationals leader and Infrastructure Minister, Michael McCormack, and the NSW government and the road could be paved with press releases.
The sleight of hand
Once again for the sake of perspective, there’s the broader matter of the government’s talent for adding up many years of spending into the future to be able to publish a large number.
As regular readers would know, the trend was started by Joe Hockey in his first budget in 2014.
In order to disguise cutting federal infrastructure spending, he announced “record” federal infrastructure spending of $50 billion, with “over six years” in the small print, meaning spending had been reduced to an average $8.3 billion a year, if it all was spent.
Whatever Joe Hockey could do, Scott Morrison could beat by 50 per cent when he became Treasurer.
His 2017 budget announced an even bigger commitment: $75 billion – but over 10 years. Yes, spending was actually being cut to $7.5 billion a year, never mind the impact of inflation over the decade.
Mr Frydenberg’s first budget in 2019 actually looked more promising at first, as it broke nine figures: $100 billion over 10 years, so a nominal increase to $10 billion a year.
And last year another $10 billion was added to the spend over the coming decade – quite possibly the money re-announced in Sunday night’s media drop – making it an average of $11 billion a year.
Take a midpoint over the coming decade though and in real terms given construction inflation, $11 billion in 2026 would be lucky to be worth as much as Joe Hockey’s $8.3 billion in 2014.
Never mind the quality, feel the width.
The biggest spin though is likely to go to budget night’s biggest number: The mighty deficit.
This is the tricky bit for the spinmeisters: How to make out that it’s a big-spending budget to provide jobs while there’s actually a sharp reduction from the 2020-21 deficit to the 2021-22 deficit – the overall impact of fiscal policy on the economy?
Again, I hope I’m wrong, but I’d guess they’ll get away with it, that all the media massaging to date will work just fine, that the rhetoric will overshadow the reality.
We’ll find out soon enough.
Michael Pascoe is a contributing editor at The New Daily.
First published at The New Daily, Tuesday 11 May 2021. See; https://thenewdaily.com.au/finance/news-federal-budget/2021/05/11/federal-budget-double-counting-pascoe/
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