Wednesday 13 May 2009

Budget review: Syd Walker

I asked a few local commentators, from various political persuasions, to write their observation of the Federal budget, just handed down by Treasurer Wayne Swan.

Syd Walker is a local political writer and commentator on world issues. He is an active environmentalist and a member of Friends of the Earth Kuranda. Walker ran for Tablelands Regional Council in 2008.

Last evening, Australian Treasurer Wayne Swan presented the Rudd Government’s 2009 budget in Parliament House, Canberra. This early report in - Australia Budget Deficit Grows to Record on Recession - summarizes the budget’s main initiatives and most of the key assumptions.

Swan announced the largest Federal budget deficit in history. The deficit is projected to decline only by 2011-2, by which time it’s assumed high rates of economic growth will have returned. Restoration of a Federal surplus is not expected for six years - and projections are the accumulated deficit will spike at around $120 billion!

A prompt and sustained return to global economic growth is therefore the crucial assumption in today’s budget.

The prospect of returning to surplus within a few years - and paying off the national debt in the foreseeable future – is entirely dependent on the resumption of rapid growth, worldwide and in Australia.

This assumption is problematic. I want to highlight one problem that almost certainly won’t be mentioned in tomorrow mornings’ newspapers.

Israel is pushing for another war in the Middle East. Its new, even more extremist government is chomping at the bit to pummel Iran. Few governments in the western world – certainly not the Australian Government, judging by its record – have the guts to demand that Israel halts its murderous plans.

Ifthere’s an attack on Iran in the next few years, expect oil prices to rise to at least $200 per barrel - plunging the already ailing world economy into a tail-spin. Other commodity prices would probably plummet as growth contracts even more sharply; in that scenario, Australia would be pushed towards implementing savage cuts in social benefits.

The man in cabinet with the toughest job of all, in my opinion, is Foreign Minister Stephen Smith. He has to tell yahoos like Netanyahu and Lieberman to pull their horns in – without upsetting Kevin’s insidiously powerful chums such as arch-Zionists Frank Lowy and Rupert Murdoch. Alarmingly, there’s no indication he’s even trying.

Let’s hope Mr Smith - and his counterparts in the USA, Britain and other countries - succeed in pursuing peace in the Middle East. In practical terms, that means getting the Israelis to stop attacking other countries - at minimum. If Israel starts another major war, the following Australian budget would be like a funeral for our national prosperity.

I’m also concerned about the nature of the growth in the Australian economy that’s projected for when economic expansion returns. I fear large components in the government’s growth projections are exports of coal and other minerals. If so, the Government is effectively banking on rising greenhouse gas emissions. It’s a short-term solution similar to giving plenty of heroin to an addict. It avoids cold turkey, but the underlying addiction is untreated.

Beyond that, the most shocking comment I heard in the ABC’s post-budget commentary was when Shadow Treasurer Joe Hockey claimed the dollar value of the government’s cash handouts exceeds all infrastructure components of the stimulus package. I’d like to hear more analysis on that. If true, it does seem grossly excessive emphasis on sustaining the consumer economy in the short term, as opposed to laying the foundations for long-term success and sustainability.

I read elsewhere that some 80% of the South Korean stimulus package is being invested in green technology. The same statistics put the equivalent figure for Australia at around 10%.

Instead of listening so intently to the Lowy institute, the Rudd Government should send a fact-finding delegation to Seoul. It must learn how to fashion polices that advantage the long-term interests of all Australians, as opposed to the short-term profits of shopping centers.


nocturnal congress said...

What about the ongoing military commitment in Afghanistan? Obama seems to have opened up a war front in Pakistan and it's my guess WE will soon be at war with the millions and millions of Pashtuns in both countries.

Bryan Law said...

Compare these figures for military spending with the "giant" $22 Billion on transport infrastructure. Among other things $1.4 billion this budget year for brawling in Afghanistan.

From Defence Budget Overview MIN079/2009

- "$43 billion worth of new initiatives over the decade - met by continuing commitment to growing the underlying defence budget by 3 per cent average real growth to 2017-18 as promised in the 2008-9 budget, follwed by 2.2 per cent average real growth to 2029-30"

- "combined measures will result in Defence receiving approximately $146 billion of additional funding across the life of the White Paper to 2030. This fully covers off the capability and other funding requiements set out in the Defence White Paper"

-"over the decade, Defence will receive approximately $308 billion under the government's new financial plan. The task of delivering on the Government's new White Paper commitments has already begun.

- Funding for the white paper initiatives for 2009-10 include :
- key capability acquisitions and projects such as artillery systems, replacement of light vehicles, upgraded rifles and enhancements to ADF command and contro lsystems, satellite communications capability and counter-Improvised Explosive Devices (IED) initiatives
- commencing work on a cyber security operations centre
- Improvements to DSTO, including the Missile Simulation Centre
- remediation of Defence's ICT
- Pay improvements for noncommissionied soldiers, sailors, air men and women
- recruitment and workforce stabilisation incentives for the Navy
- Improvements to ADF healtchare
- greater flexibility in ADF housing and accommidation, enhancements to mental health care, remuneration and asistance to families
- remediation of ageing power, watr and sewerage infrastructure across our defence bases and refurbishment of old working and live ina ccommidation

1.7 billion announced in 2009-10 budget for major ADF operations. Afghanistan, and the wider Middle East Area have 1.4 billion, 62.2 million allocated for operations in Iraq. to protect embassy and staff, and. 213.8 million to East Timor and 29 million to the Solomons. 12.6 million to Operation Resolute to provide whole of gov focus on domestic maratyime security activities. to protect Australia's exclusive economic zone

QLD defence infrastructure gets 537.7
NSW gets 271.7
ACT gets 147.2
Victoria gets 250.9
Tasmania gets 10.6
SA gets 267.9
NT gets 159.4
WA gets 155

Min 090/2009

The Minister for Defence affirmed today that hte Rudd Gov would invest approx 30 billion over the decade TO FILL THE HOLES IN THE DEFENCE BUDGET THAT HAVE BEEN INHERITED FROM THE FORMER GOVERNMENT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

How many civilians can we kill with this? How many regugees can we create? As Treasurer Swan says "I love the smell of napalm in the morning".

nocturnal congress said...

Well, it's a costly exercise, Brian, to diminish our reputation in the eyes of the world. Oh, for a leader with the gonads to stand up to the USA and say, "We might be friends but we won't support your imperial wars.....and how about you start looking after your own people for a change..."

KitchenSlut said...

The unknown in the fineprint of the Defence budget is the impact of the SHDDPP (strategic hairdryer defence procurement program). It's not clear if this is specifically accounted for in the budget!

This program will provide funds for acqusition of hairdryers to accomodate the possibility of any Prime Ministerial photo opportunity on a flying visit to any unit worldwide. The strategic advantage of this to Australia is obviously immense! It is also essential to counteract the obvious strategic advantage of Mr Obama,who has no need of a hairdryer, relative to our own PM at least.

Sources who can not be named indicate that Jim Turnour has neghotiated the biggest coup of his constituency and will soon announce that the 'Hairdryer Defence Procurement Contract' will ensure that 0.01% of the content all hairdryers will be procured from Asian sister cities of Cairns. Detailed Treasury modelling confirms that this will deliver 56 sustainable jobs in Cairns within the next millenium.

However, there are uncertainties still to be revealed by an internal Defence enquiry as to the cultural impact of hairdryer deployment. In islamic Afghanistan this may be regarded as an aggressive offensive weapon while at an ANZAC day ceremony in Flanders it could be seen as something more sensually passive?