The price of votes in this election is going to be expensive

A single number tells Australians just how desperate Scott Morrison and Josh Frydenberg have become in their quest to beat Anthony Albanese to the prize of power.

Their decisions will cost $30.4 billion over five years by cutting tax revenue and boosting spending across all policies. That is one measure of the starting price for the federal election.

Anthony Albanese and Scott Morrison.Credit:

For all the attention on the household measures in this budget, such as the cut to fuel excise, these retail moves are just one part of a much broader spend-a-thon that offers targeted programs for key election battlegrounds.

The regional programs, for instance, promise $1.3 billion for broadband and mobile coverage projects in locations yet to be announced, which means voters may find out more during the campaign. The “regional accelerator” program offers $2 billion for employers in places unknown, setting up more announcements before election day.

The Stronger Communities Program gets $29.2 million for another round of grants while the Safer Communities Fund gets $50 million to build projects for local governments and community organisations – a scheme that helped Liberal MPs campaign in the past.

In short, parts of this budget are the 2019 election battle plan all over again. Three years ago, the Prime Minister and Treasurer set up funds worth about $5 billion in the budget to wage a seat-by-seat fight during the campaign.

That will keep the Auditor-General busy.

The political calculations are no surprise but the generosity comes when the Commonwealth debt was $866.1 billion on Tuesday and is due to keep climbing. The interest bill on gross debt will be $17.9 billion next year, more than forecast for the Pharmaceutical Benefits Scheme and just short of the amount for people with disability.

While Morrison and Frydenberg say they are improving the budget bottom line, the truth is that they are doing less than they could with all the money flowing into Canberra from higher revenue from commodity prices jolted by the war in Ukraine.

The budget is in much better health than it looked in the depths of the pandemic and the parameter variations – changes that bring money in or out regardless of new decisions – show the gains.

The effect of the parameter variations is to add $114.6 billion to the bottom line over the five years to June 2026, which means the policy decisions add up to about one quarter of those gains.

Politics dictates this approach. The essential decision is to delay the improvement to the bottom line. The election comes first.

Anthony Albanese is likely to pass the fuel excise, the household payments and the expanded tax offset for 10 million workers as quickly as the government asks, most likely in the next day or two.

While the Labor leader wants to fight over wages and the cost of living, he is not picking a fight over the bottom line. The shadow treasurer, Jim Chalmers, has even sent a signal that Labor is not worried about whether it spends a little more or a little less than the Liberals during the campaign.

“Whether Labor takes to the election a bottom line which is a little bit stronger or a little bit weaker than what the government proposes is not the main game,” Chalmers said before the budget.

“The main game is the quality of the investment in skills, in the digital economy, in child care, in cleaner and cheaper energy, in advanced manufacturing and the care economy.”

Even so, the budget offers a stimulus without an economic emergency. Yes, there is a world crisis after the Russian invasion of Ukraine and an urgent need for spending on security. Even so, the government itself predicts the global oil price will settle back later this year.

The budget largesse could have been worse. John Howard made a deeply expensive cut in fuel excise as Prime Minister in 2001 when he paused indexation to convince voters he felt their frustration over the cost of living and should get their votes in the election that year.

Morrison and Frydenberg have made a bigger cut but kept it temporary. But it will be an expensive election.

Jacqueline Maley cuts through the noise of the federal election campaign with news, views and expert analysis. Sign up to our Australia Votes 2022 newsletter here.

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