Australian Prime Minister Morrison is trying to sell voters for budget breaks

Australia's Prime Minister Morrison addresses the media during a press conference at Kirribilli House in Sydney
FILE PHOTO: Australia’s Prime Minister Scott Morrison addresses the media during a news conference at Kirribilli House in Sydney, Australia February 24, 2022. AAP Image/Bianca De Marchi via REUTERS

March 30, 2022

By Wayne Cole

SYDNEY (Reuters) – Australia’s Liberal national government, lagging behind in the polls, tried to sell A$8.6 billion ($6.46 billion) in budget gifts to cover a cost-of-living emergency rather than transparent ones on Wednesday Try to buy votes.

Prime Minister Scott Morrison, who faced a tough election in May, led the marketing blitz with a spate of media interviews saying relief was needed to deal with soaring fuel prices.

“It’s responsible because it’s targeted and it’s only for a temporary period because those impacts on the cost of living are real and are there right now,” Morrison told a radio interviewer.

Other countries, including New Zealand, Japan and South Korea, have announced measures to counter rising energy prices following the war in Ukraine.

However, some were skeptical when one interviewer asked, “Are you going into the cost of living with this budget, or is it just the cost of winning?”

Opinion polls show the opposition Labor Party is between 4 and 16 points ahead, while bookmakers said on Wednesday the odds against Morrison returning to power had just risen sharply.

The government’s painstaking messaging campaign was also thwarted by claims by one of Morrison’s own Liberal senators that he was a “tyrant” with no “moral compass”.

Morrison dismissed Concetta Fierravanti-Wells’ allegation, saying she was “disappointed” to have lost selection for her seat.

Also vying for media attention were fresh East Coast floods in areas already washed out by the wettest March on record.

Television coverage of cars driving on high roads ate up much of the airtime that Morrison had hoped would be devoted to his tax cuts and improved economic forecasts.

The economy recovered faster last year than anyone expected. Unemployment hit a 13-year low of 4% and is expected to soon reach the 3.75% level last seen in the 1970s.

Wage growth should also accelerate, but not enough to outpace inflation, meaning real wages would contract this year.

The strong labor market combined with sky-high prices for many of Australia’s resource exports has been a major boon to tax revenues and has enabled the government to forecast much smaller deficits than forecast just a few months ago.

However, the budget is still negative at A$79.8 billion for the year to the end of June, with a further A$78.0 billion earmarked for 2022/23.

Currently, this borrowing is considered manageable by analysts as the level of debt is still low compared to the rest of the developed world.

Rating agency Fitch said the budget does not immediately threaten Australia’s coveted triple-A credit rating but is a long-term warning.

“It leaves fiscal metrics and debt stabilization vulnerable to a potential underperformance of economic growth, especially as the budget does not anticipate a return to fiscal equilibrium over the next 10 years,” said Jeremy Zook, Fitch’s director of sovereign ratings.

($1 = 1.3312 Australian Dollars)

(Reporting by Wayne Cole; Editing by Lincoln Feast.) Australian Prime Minister Morrison is trying to sell voters for budget breaks

Bobby Allyn

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