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Speaker 1: The other story or the other issue that we are

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Speaker 1: talking about this morning is indeed the budget that was

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Speaker 1: handed down yesterday. And joining us on the line right

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Speaker 1: now is CDU political economist Professor Rolf Gerretson. Good morning

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Speaker 1: to you, Rolf.

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Speaker 2: How have you very well?

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Speaker 1: Thank you, Ralph fannot was an interesting day yesterday with

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Speaker 1: that budget handed down. Mate. Have you ever heard of

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Speaker 1: budget handed down and a resignation at the end of it?

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Speaker 2: And I'm very old. I mean I was around when

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Speaker 2: Boosler was a boy, so I would remember it if

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Speaker 2: it had happened before.

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Speaker 1: I agree, it's it's certainly not something that we've experienced

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Speaker 1: before in the territory. And really that resignation has dominated

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Speaker 1: the headlines. But Rolf, what did you make of the

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Speaker 1: budget yesterday?

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Speaker 2: Well, and I was very surprised by the budget. And

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Speaker 2: if you allow me to just get pompous an academic

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Speaker 2: for a seconds. In science, there's a theory called the

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Speaker 2: budget electoral cycle, and that says that the government gets

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Speaker 2: elected and then in the first budget it meets all

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Speaker 2: its promises, that spends a lot of money, and then

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Speaker 2: in a subsequent budget or budgets in the case of

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Speaker 2: a four year electoral cycle like we have, it tries

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Speaker 2: to increase revenue and suppress expenditure, and then in a

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Speaker 2: pre election budget it increases expenditure, you know, promising it's

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Speaker 2: all goodies. And when I read the budget, I thought,

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Speaker 2: this is a pre election budget. How can you have

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Speaker 2: a pre election budget in the middle of the government's term, right,

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Speaker 2: And because you see it had lots of expenditure increases

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Speaker 2: and also the forecast of the deaths that's going to

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Speaker 2: zero by twenty twenty six and I thought this is

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Speaker 2: a very odd budget for this stage of the electoral cycle.

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Speaker 2: And then of course mister Gunner hops up and and

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Speaker 2: I thought, ah, well, know what it is is a

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Speaker 2: legacy budget. In twenty sixteen he became Chief Minister and

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Speaker 2: one of his key election promises was that he would

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Speaker 2: bring the budget back into black. And so what he's

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Speaker 2: done is he's leaving and saying, in effect, well I

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Speaker 2: haven't done it because of COVID, but you know it's

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Speaker 2: going to be done. So I mean, once he announced

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Speaker 2: he resigned, the budget suddenly made sense to me.

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Speaker 1: Yeah, right, that's some good insight rolph, which a lot

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Speaker 1: of people I don't think would have thought too much

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Speaker 1: about but it does make sense then, like you've said,

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Speaker 1: a legacy budget, is it as good as the Chief

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Speaker 1: Minister has tried to make it or the former Chief

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Speaker 1: Minister has tried to make it sound?

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Speaker 2: Well, you know, all of us are citizens, are in

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Speaker 2: favor of increased expenditure, and you know in that sense

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Speaker 2: it is good. I mean they are lucky in the

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Speaker 2: sense that the national budget is national economy is held

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Speaker 2: up better under COVID than expected, and so all those

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Speaker 2: good folks in Sydney and Melbourne who are spending lots

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Speaker 2: of money and giving us our GST or their GSC,

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Speaker 2: you know, it's a good budget in that sense. I mean,

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Speaker 2: our fiscal position is much stronger than we expected it

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Speaker 2: to be at this stage, you know. I mean I

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Speaker 2: still think that the tradition of the removal of the

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Speaker 2: budget deficit by twenty twenty six, it's about cookie land.

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Speaker 1: But anyway, so your recond it's do your recond it's

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Speaker 1: pretty fastical we're not going to get there.

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Speaker 2: Well, no, I mean, you know we're going to have

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Speaker 2: increased inflation. I mean, you know the Reserve Bank has

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Speaker 2: already quiet, it's got across the bowser sort of only

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Speaker 2: a little shot. I mean, you know, they took the

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Speaker 2: rate up to thirty five basis points. They should probably

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Speaker 2: should have taken up to forty, but they're being cautious

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Speaker 2: at this stage. But it's clear that inflation will top

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Speaker 2: five this year. Now people are hoping it will go

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Speaker 2: down next to year. But I just expect we're going

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Speaker 2: to see large waging creases because basically the working people

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Speaker 2: of Australia are sick of having their real living standards

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Speaker 2: of road. So I expect inflation to continue at a

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Speaker 2: fair higher rate for the next few years. That will

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Speaker 2: mean that the GST revenue goes up. So that's good

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Speaker 2: for us, you know, because we get a disproportionate share

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Speaker 2: of it. But the problem is extended to costs will

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Speaker 2: go up. P see. I mean a lot of this

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Speaker 2: forward forecasting is based upon the four years of pay

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Speaker 2: for reasons for the public sector, and I don't think

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Speaker 2: labor parties sustain that. I think they'll crack in some stage.

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Speaker 1: Yep, and Ralph, I guess that is something that you

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Speaker 1: and I had spoken about last week as well. With

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Speaker 1: this public sector pay freeze, how long do you reckon

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Speaker 1: they're going to be able to keep that in place.

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Speaker 2: I don't think it'll see out. The ear right peically

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Speaker 2: is a federal lavy government and they take a case

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Speaker 2: of the their work commission for more than five percent

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Speaker 2: pay increase. Then the workers in the territory you're going

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Speaker 2: to say, well, hang on a second. You know I'm

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Speaker 2: getting nil paying increase. The cost of lok is going up.

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Speaker 2: I mean, despite the Morrison governments dropping half the rebate

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Speaker 2: or half the tax on fuel, diesel prices are rising

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Speaker 2: again as the oil majors profit for the oil majors

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Speaker 2: and petrol station owners decided to take a bit of

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Speaker 2: super profit out of this, as I predicted at the time.

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Speaker 2: So you know, I just think that the pressure will

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Speaker 2: become untenable. You have to remember, because we've got such

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Speaker 2: a huge public service relative to our side. Four percent

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Speaker 2: of the electorate in the northern absolutely, and that's a

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Speaker 2: very crucialgment of the electric do you only need in

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Speaker 2: all those you know, because our seats are so small,

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Speaker 2: you only need a couple hundred votes to shift and

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Speaker 2: suddenly you've lost a seat.

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Speaker 1: Well, it is certainly a very interesting time, there is

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Speaker 1: no doubt about that. I know you're a political observer,

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Speaker 1: a keen political observer, Ralph, who do you reckon is

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Speaker 1: going to be the next Chief Minister.

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Speaker 2: I'm a reluctant critical. I don't like watching the way

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Speaker 2: sausages are made. Well, you know, I hear rumors that

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Speaker 2: the caucus is split, but I think Nicole Madison will

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Speaker 2: end up Chief Minister. But you know I'm usually wrong

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Speaker 2: when I make these.

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Speaker 1: We'll wait and see. Let's see whether we find out

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Speaker 1: on Friday or not, or whether it turns into a

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Speaker 1: bit of a debarcle. Ralph Garretson a c dou political economist,

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Speaker 1: Professor Rolph Garretts, and I should say we really appreciate

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Speaker 1: your time this morning.

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Speaker 2: Delighted Katie. Good to hear from you.

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Speaker 1: Thank you,