MUNGO MACCALLUM: Budget 2020 — Coalition jettisons debt cult mantra for jobs

Last night's Budget announcement revealed that the Government is determined to make an attempt to repair Australia's unemployment figures, writes Mungo MacCallum.

IN 1983, with an economic downturn – not even a proper recession – in play, the new Prime Minister, Bob Hawke, convened his economic summit to implement his election agenda of recovery, reconciliation and reconstruction.

The straight-talking New South Wales Premier, Neville Wran, set the scene in one terse sentence. “Delegates,” he rasped, “this summit is about three things: jobs, jobs and jobs.”

Fast forward to the 2020 Budget and the message is the same. Labor leader Anthony Albanese stole from it in so many words. Even our normally voluble Treasurer, Josh Frydenberg, succumbed to the succinct slogan last weekend. And he confirmed that after a generation of the holy crusade for the sacred surplus, he, too, is going back to embracing good old-fashioned economic orthodoxy.

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Debt and deficit emergency? What debt, what deficit? The rhetoric of 2019 has been shamelessly abandoned and replaced with a single-minded determination to deliver an unemployment statistic that can be credible at the next election.

So the revenue base is to be trashed — massive tax cuts will be brought forward in the hope that the punters will unleash a spending wave to kickstart the moribund economy. Some of it will probably help, much of it certainly will not — we have repeatedly watched the failure of trickle-down policies in which the rich trouser their loot and the moguls slip it into buyouts, dividends and bonuses.

In spite of the pandemic (or perhaps because of it), the profit share is still outstripping meagre wage increases. For many bosses, the mantra of “we’re all in this together” translates to “what’s in it for me? Stuff you Jack, I’m all right”.

But Scott Morrison’s Damascene conversion is not just the tax cuts he must offer to make his package palatable to the party room. He is offering a veritable cornucopia of cash before, during and after this week’s budget — a torrent of public spending whose extravagance would make John Maynard Keynes blush with envy.

Last week’s handout of $1.5 billion for our back-to-the-future manufacturing industry was, as he boasted, just a foretaste. The promise to wind back JobSeeker, JobKeeper, JobSleeper and the rest of them will be kept, but other direct stimulus measures will swamp any hint of parsimony.

And there are other ideas which will not put too much stress on the bankrupt Treasury. Immigration, arguably the most reliable and efficient engine of growth, has fallen to perilous levels — we are facing a situation where our population will, for the first time in living memory, actually decline. Reversing that trend should be an urgent priority, and the Peter Costello approach of more bonking is too long term.

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Then bribes can be tried — not of filthy lucre, but of future favours. In the agricultural sector, desperate for pickers of produce, the idea of offering temporary visa holders, both tourists and refugees, a fast-track to permanent residency is a no-brainer.

Locals have made it clear that the wages are insufficient to attract them and employers are unwilling to accept the market solution: pay more. And the long history of abuse – underpayment, squalid conditions and even sexual molestation – is hardly an incentive to taking the jobs.

There is also a scheme to entice workers from the Pacific Islands — uncomfortably reminiscent of the blackbirding of Kanakas in colonial times, but if it can be policed, it may be worth a try.

But these are on the fringes. For a realistic dividend, both economic and political, Morrison is relying on his cash splash. And at the very least, it should supply a boost to confidence, desperately needed as the foundation on which recovery can be built.

But as always, the implementation – the actual nuts and bolts – underpinning the Morrison plan are far from clear. It is all very well to spruik the need for jobs and to point to areas where there is both a shortage and a quick return. But the middle bit – the workers – needs a lot more thought.

Obviously we need more apprentices. But with the cutting of some $3 billion from TAFE in the last few years, it will be hard to find enough teachers for all the applicants required. And more importantly, much of their curriculum is in danger of becoming obsolete and irrelevant.

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For all the talk of innovation, science and engineering, few tradies are numerate in robotics and computing, increasingly essential in what was quite recently seen as blue-collar manual work. There is little point in training up a class of blacksmiths, however attractively nostalgic the notion may seem.

At one level Morrison knows that — hence his heavy-handed approach to forcing universities to force students into vocations that he hopes will give him a quick economic dividend. But as so often happens, he has not thought it through. If he really wants to shove the manufacturers into action, he has to provide the skilled workforce they need.

And it would also help if he set some specific targets. Struggling to get a few words in between ScoMo’s filibuster, in the manner of Joe Biden trying to be heard over Donald Trump, Anthony Albanese has nominated social housing as an obvious one — a huge need and relatively easy to move on.

And, of course, there is always renewable energy. Morrison has not mentioned it specifically, but there have been hints that he has not entirely ruled it out. And if nothing else appeals, there are any number of roads, railways and bridges to repair and upgrade.

These will be derided by some as picking winners, make-work, dead-end jobs. And indeed, they are not everyone’s idea of a lifetime career. But you’ve come to the bottom line. Right now there are officially 4.8 unemployed for each single advertised vacancy — that’s the government spin. But, in reality, the ratio of those not working to those who want to work is about 17, not counting widespread underemployment.

And another sheaf of announcements to be left in the out tray, waiting for the shredder, will not hack it. What is required is a hefty kick in the arse. Morrison is not reluctant to put in the boot, but he has to be sure of his aim, his run in, and his execution. He needs to kick at least one of the three goals nominated earlier. Actually just one will do — jobs.