A big-spending budget leaves Labor wedged. Where to now?

As Josh Frydenberg revealed his big-spending budget, Labor was roasting the Coalition for delivering its eighth consecutive deficit. In a week dominated by the treasurer, a narrative quickly coalesced — helped on by a flurry of drops — that this budget would be generous, almost “Labor-lite”.

With funding for aged care, childcare and mental health, it seemed like a pre-election budget that left the opposition with little room to manoeuvre. Its immediate response seems to have focused on the government’s wastefulness: the $1 trillion debt, the failure after eight years to deliver a surplus, the preference for a sugar-hit headline over policy substance.

But voters seem to like big spending, and in a time of global economic uncertainty the budget’s generosity could go down well. Can deficit-hawking work for Labor?

Stop talking about debt

There’s a sense of frustration in the Labor ranks. When it was last in government it was excoriated by the media and Tony Abbott for the deficits it ran up responding to the global financial crisis. Now the Coalition seems to be shamelessly abandoning that line of attack, taking on even more debt and appearing to reap the benefit.

That leaves Labor in the tricky position of trying to explain why its big spending was good big spending but the Coalition’s is bad. And that’s complicated by what Peter Lewis, director of progressive strategic communications outfit Essential Media sees as voters’ pre-written assumptions about Labor profligacy: “Regardless of performance, voters rightly or wrongly see right-of-centre parties as better economic managers.”

The difficulty cutting through and explaining the difference between good and bad spending sometimes leads to the party sounding like Abbott circa-2012, banging on about big dangerous debt. That was the substance of a Facebook post attacking the Coalition’s eighth deficit, and it’s a theme Anthony Albanese and shadow treasurer Jim Chalmers have frequently returned to over the past week.

Economist Alison Pennington, from the Centre for Future Work, says progressives need to look beyond obsessing over debt: “The Coalition’s moved on from this deficit bogyman politics, and all other organisations should move on too.”

Pennington says the response needs to be less on the size of the debt, but the conditions being attached to the funding increases in crucial areas like childcare and aged care.

Where does Labor go?

Perhaps Labor’s best bet is to focus on the quality not the quantity of the government’s big spend.

“Labor are right to point to the hypocrisy of the Coalition, that raged against small amounts of money being spent on school halls and now championing enormous amounts of money on imported utes,” the Australia Institute’s chief economist Richard Denniss tells Crikey.

Chalmers appears to be tapping into that, with a repeated soundbite about the government’s record over “sports rorts and dodgy land deals”.

Lewis says there’s ample room for Labor to look at whether the government’s big spending programs around aged care and mental health actually achieve what they set out to do, and for the opposition to try to frame the government’s spending as adopting Labor’s approach to economic management.

But all these arguments are hard to cut through during budget week — one which belongs to the government of the day who has the opportunity to frame the narrative.

The best thing for Labor could just be to wait the week out, and — shockingly — not worry too much about the budget.

Lewis said: “Treat the budget as a big news day, move on, and go after the big Achilles heel at the moment for the government which is the vaccine rollout and hotel quarantine.”

Can Labor get smart and go for the government’s Achilles heel? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication in Crikey’s Your Say section.