CHRIS RICHARDSON: The Senate Is Threatening To Put A $300 Billion Hole In The Budget

It’s easy to extrapolate the first couple of weeks of the new Australian Senate’s operation into a disaster of immense proportions.

Or, you can take Nick Xenophon’s more cautious approach and surmise that the government will in time see that the new Senators are here for six years, have something to offer, and need to be taken seriously.

Which school of political thought you ascribe to in this regard will then inform expectations about the future passage of the government’s budget and the fiscal outlook in the years ahead.

Deloitte Access Economics Chief Chris Richardson is clearly not encouraged with what he has seen so far in the Senate and told the ABC’s 7.30 last night that:

It looks as if we won’t get budget repair in Australia. Essentially, the Senate is not just blocking the budget for the next handful of years, but blocking the budget for the next decade. Across the next 10 years and once you add in the interest bill as well, you’re talking about $300 billion that the Senate is implying it will impose.

That is certainly the apocalyptic end of the spectrum and would require the current uncertainty, as the new Senate settles in, to become entrenched. It also pre-supposes that the PUP Senators, the Liberal Democrats David Leyonhelm, Democratic Labour Party Senator John Madigan and Motoring Enthusiasts Ricky Muir are simply obstructors.

More particularly, in contrast to what we have already seen this week with the carbon tax amendments and the FOFA rollback, it also pre-supposes the government either won’t or can’t negotiate with the cross benches.

In the worst case scenario Chris Richardson is probably right. But surely the politics of politics suggests that if, more likely when, the new Senate settles down many of Richardson’s concerns may be rendered redundant.

At least you’d hope so. Right?

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