Australia’s 2024 budget and reliance on the market as the saviour of the economy

Contributed by Joe Montero

As Australia edges towards the May budget, the leaks are starting to fall. Carefully selected and timed information leaks are traditionally used by government to condition the public into what is coming. Sometimes they herald what is going to happen. At other times they are kites flown to test the waters of what the public is ready to accept.

Much less so this time. With just two weeks to go, Anthony Albanese is telling little, and focussing on the question of violence to women. This is an important matter, but the prime minister risks being accused of using this as a diversion from questioning the budget. There may be some truth in this.

It’s the same when it comes to connecting of the recent mass stabbing at Boni with a claimed massive threat of terrorism and need for censorship of social media. It has the look of an emerging law and order campaign, a classical diversion technique in Australia’s history.

Will the standoff and tensions associated with the beginning of university students camping out on campuses to voice opposition to Israel’s slaughter in Gaza lead to crack down on them and feed the law-and-order rhetoric? Time will tell.

One thing’s for sure. The Albanese government has motive for turning attention away from the economy and what it’s going to do about it in this year’s budget. Australia wants to know what is going to be done to turn around a lacklustre economy and how the worsening cost of living crisis is going to be taken on. And there is little appetite to answer these questions.

Photo by Martin Ollman/NCA NewsWire: Australia’s Treasurer Jim Chalmers

Treasurer Jim Chalmers was on the ABC yesterday, trying to talk up the spin. The government, he said, is going to spend big on building a quantum computer by delivering a huge sum of taxpayer’s money to one company, PsiQuantum, to carry out research. We’re talking about tens of millions of dollars. The other giveaway is tipping billions of dollars will be there for the security industry. This is likely to be connected to a boost in military spending, already geared to rise by $1.1 billion or to 2.4 percent of Australia’s GDP.

Of course, investment in the economy is needed. but it must be of the right kind. high tech is important, if devoted to improving the lives of all Australians. not if devoted to war. An added problem is that there has been massive evasion of the detail. One thing there has been, is no shortage of hints about cutting the budget deficit. The announced number one priority is to cut inflation. This means a net cut in spending. Where will this be applied?

But what is going to be done about the cost-of-living crisis? Very little has been promised so far. We have last week’s second report of the  Economic Inclusion Advisory Committee (EIAC), which recommended help for the unemployed and others in poverty, through raising payments provided by Centrelink. This is not going to happen.

On the other hand, there has been talk about rebuilding manufacturing as a means to create jobs. This is at least in part a concession made to the unions to keep them on side. Albanese announced last month an intention to put taxpayers’ money more extensively into helping high tech private business provide the answer through the $15 billion National Reconstruction Fund (NRF) already in place.

Don’t be confused into believing that this is a major shift away from neoliberalism and the market must rule ideology. On the contrary, the purpose of this form of government intervention is to strengthen both by feeding the growing dependency of big business so government to survive. This is a hallmark of the neoliberal era. And this approach continues the tradition of welfare to the big investor and has nothing to do with taking on the cost-of-living crisis.

Taking on the cost-of-living crisis would involve a considerable measure of control over how the money is spent, ensuring that this is in the public interest and that the benefit is spread to all. It involves taking some control over finance, ensuring that it operates according to the needs of the economy and social objectives. None of this comes into the picture. In the short-term, this means relief for those falling into poverty and wage earners. Lifting the majority would provide an engine for economic growth. Instead of this, tax cuts may be delivered to the better off.

Australia is suffering from the jump in the number of small businesses going broke or at risk. Up 20 percent in a year, according to credit reporting firm Illion. Despite being a significant part of the economy providing many jobs, there is no sign of help for them. The major causes of small business failures are falling demand as consumers tighten their belts, plus rising rent, and credit costs.

Taking on the cost-of-living crisis means providing some help for small business as part of the package.

In short, don’t expect too much from this year’s budget.

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