Jim Chalmers has been insisting for days he is utterly focused on the economic cycle, not the political cycle, as he put his Budget together.
Well, the economics are done, now it’s all about the politics.
Last year’s Budget was all about targeted cost-of-living relief that went to the people hurting the most.
This year, the support goes to everyone. And doesn’t the Government want you to know it.
“Just as every Australian taxpayer will get a tax cut, every Australian household will get energy price relief,” Chalmers said early on in his Budget speech.
The phrase got a hefty workout throughout the sell on Wednesday — on television, on radio, in Parliament and fronting reporters in person.
No doubt you’ll soon see it on ads and flyers and social media.
It didn’t take long for media and the Opposition to twig that power-bill relief for every household means if you pay multiple power bills — say, if you own a holiday house — you will get multiple rebates.
“If we take a typical Australian, let’s call him Andrew, who recently had to relocate from Beverly Hill to Parramatta for work reasons, and happens to own five houses including a newly acquired $12 million beach house at Palm Beach, will he be eligible to receive the rebate on all five houses?” Coalition frontbencher Paul Fletcher asked, outlining exactly the situation of Labor MP Andrew Charlton, who was mysteriously out of the chamber at just that point in time.
Of course, West Australians are old hats at this with the State-funded rebates that operate in the same way now onto their fourth iteration.
The official explanation from the Government is that in the interests of getting the money out the door as fast and as simply as possible, it has to go to everyone.
Last year’s Federal rebates only went to people on pensions and welfare — or who were already eligible for some concessional status on their power bill — and involved the States topping up the funds to differing levels and sharing information about who should receive it.
For a Government looking for a quick way to push down inflation, that’s a lot of fuss.
And for a Government with an eye to an election that is — at most — a year away, easing the cost pressures for every single middle-income voter without them having to do anything about it is awfully tempting.
What was that again about forming the Budget based on the economics not the politics?
A cynic might also note that the $300 rebates — split into four instalments across the next financial year — is neatly just above the ‘$275 lower-power bill’ promise the Coalition has tried to dog Anthony Albanese with.
Never mind that power bills, on the east coast at least, have soared by much more than that over the past two years.
Chalmers was pushed on this point a couple of times on Wednesday.
“You are referring to a 2025 outcome based on a 2021 forecast. We found a way to help people with their energy bills right now in 2024 when the pressure is on,” he said.
“People on the highest incomes are not our focus, they’re not our concern. But in the absence of redesigning or designing a new system of data-sharing and means testing amongst the energy retailers, we made the assessment that the best way to do it was to provide (rebates) broadly.”
The other element of the Budget’s economics that is fraying once the politics get involved is the billions of dollars in tax credits on offer for critical minerals processing and green hydrogen projects.
As my colleague Dan Jervis-Bardy writes elsewhere in these pages, this was transformed within hours to “billions for billionaires” as the Coalition attacked the notion that mining magnates might get (more) tax breaks.
It is — at this stage at least — opposing the support that smaller miners say is vital to getting the downstream processing industry off the ground.
Chalmers is genuine in his belief that Australia must create and seize a place in global supply chains and not let circumstances beyond its control dictate the future of people here.
He said as much in his first speech to Parliament, 11 years ago.
The options open to Australia were to pretend the pressures didn’t exist or that it was possible to go it alone, or to use the country’s advantages “to find a well-paid place for our workers in the links of elaborate global value chains” that gave people the tools of success.
But then again, as he said on Wednesday, he has learned over long years in the trenches of economics and politics “that budgets get notoriously over-simplified”.