The Morrison government has crafted a solid treatment and recovery plan to nurse Australia back to economic health over the next couple of years, but ducked history's invitation to reform it for the next couple of decades.
It's a plan loaded with sugary stimulants to get the system moving by the next election, but without a long-run muscle-building program for the years beyond.
Lots of sugar hits but not much serious muscular policy.Credit:File photo.
The government will point to its business investment allowance, expected to support some $200 billion in new investment and add 50,000 jobs over the next couple of years. "That's good," says Anthony, "and the bigger the better." But it's a temporary measure.
The real test for Morrison was set out by Reserve Bank's governor Philip Lowe last year: "The best option is creating an environment where firms want to innovate, invest, expand and hire people. I think that's the best option. I'm sure at the analytical level the government would agree. The challenge they have is to develop a program to do that."
The budget is not that program. Innovation policy remains stunted; the investment incentive is temporary. And there are no structural reforms to the economy, the sort of reforms that would open new vistas for entrepreneurs and growth industries.
And it's missed the chance for visionary infrastructure investment. A 10-year plan to invest $100 billion has been incrementally expanded to $110 billion.
The government's reminiscent of the cocoon-building spider. It has a fixed pattern of behaviour. It starts to build its cocoon, floor first, walls next, in one place and, if it's picked up and put somewhere quite different, picks up from exactly where it left off.
After a couple of years of extraordinary short-term measures, the government, post-pandemic, plans to go back to essentially the same program it had pre-pandemic. For Australia's economic future, it's necessary, but not sufficient.
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