At the time of writing I’m anticipating the 2021 Federal Budget. It will be the 26th time I’ve sat in the House of Representatives Chamber for the annual statement of the Government’s revenue and spending intentions. But as readers will know by now, this Budget will be like no other. It’s now raining money.
Despite starting the week with a $200 billion Budget deficit, the Treasurer is determined to keep spending big. For that, there’ll be little criticism from the economic commentators. Most believe some more old-fashioned pump priming remains necessary in the face of the global pandemic.
The real tests for the Government’s Budget are first, how smartly the borrowed money is spent and second, the extent to which there is a plan to reduce the deficit over time. You can’t keep borrowing and printing money forever; our grandchildren will not thank us.
That means the money we spend now must be money well spent. It can’t be about the next federal election, which is not that far away.
Rather, at the heart of every spending decision must be a determination to lift productivity in the economy. A more productive economy will lift wealth and bolster our capacity to retire debt in the years ahead. The various keys to raising productivity include our investment in people, skills training, education, and an investment in childcare, so that people with skills aren’t sitting outside the workforce.
Road and rail infrastructure projects are also important. The capacity to move both people and goods efficiently is crucially important to growing a strong economy. Nowhere is that truer than right here in the Hunter region. Let’s hope the Budget’s infrastructure spending decisions are based on merit and we’ve received our fair share.
Many of the other spending initiatives we’ve read about in the pre-Budget media frenzy are an admission that the Government has been underspending in these areas for far too long. Aged care is the most obvious example. Another is the capacity of working families to access affordable childcare.
But no matter how well borrowed money is spent, it won’t provide the economic boost we need in the absence of mass COVID-19 vaccination. Without it, the next lockdown remains just around the corner. Our vaccination performance in Australia has been poor by international standards. We have been given too few vaccine choices and the roll-out remains too slow. Further, many are losing confidence in the AstraZeneca vaccine. So, we collectively wait nervously.
My thanks to Singleton Business Chamber for organising and hosting the latest coal industry economic update in Singleton. It was a timely reminder of the importance of the coal industry to our region.
We learned that the industry remains responsible for almost one third of the region’s economic output. Around 13,000 people remained directly employed in the industry and 3,400 supplier businesses provide many, many more jobs.
Importantly, around $6.5 billion sits in the investment pipeline for new mines or mine extensions. Throughout Asia, demand for our relatively clean and efficient product remains strong. That’s good news for local jobs and local working families.