I was away last week when the federal government released its 2017 budget, which has the look of a government preparing for election.
It’s not the worst budget I’ve ever seen handed down but there was one glaring omission.
There is still no price signal in carbon and its lack was the elephant trading scheme in the room of Malcolm Turnbull and Scott Morrison’s second budget.
The media has dubbed it a “Labor lite” budget, spending big on health care, education and infrastructure and paying for it by taxing the banks.
But its failure to understand the role of carbon in our economy is hobbling Morrison’s equally Labor-like promise the budget was a “credible path back to surplus”.
Like Wayne Swan in 2011 and 2012, Morrison predicted this would happen in four years but given Turnbull’s recent public commentary against an Emissions Trading Scheme it is just as difficult to believe about 2021 as 2016.
Australia’s last budget surplus was when the price of iron ore and coal were through the roof. Though the prices for both have increased recently even the government says it is “prudent to assume” neither will return to massive revenues in the future unless they can somehow deal with carbon emissions.
A day before the budget, ABC Four Corners program exposed the energy crisis as a failure in public policy. But a night later its budget analysts in Canberra more or less ignored the issue.
But from talking to small and big businesses I know energy reliability and cost is becoming the single biggest burden on the Australian economy. Government plans such as Snowy 2.0 and putting a reserve price on gas will barely scratch at the surface. Cyclone Debbie was seen as a one-off disaster but one of the predictions of climate change is for stronger and deadlier storms so another Debbie, Yasi or worse in the coming years is hardly out of the question.
Solar and wind barely merited a mention in the budget but they will surely be the key to solving the “debt and deficit disaster”. Australian coal is the best in the world but it must remain in the ground for now.