In the history of the lucky country’s economic managers, Labor Treasurer Jim Chalmers must be one of the luckiest. Thanks to Vladimir Putin’s invasion of Ukraine, Australia is enjoying record prices for its coal and gas. China’s determination to kickstart its economy out of is zero-Covid doldrums has also kept demand for iron ore high.

All this is very embarrassing for federal Labor which has committed to cutting greenhouse gas emissions by 43 per cent by 2030. State Labor governments in power from sea to shining sea have even more ambitious targets. So, the funniest line in Lucky Jim’s budget was his embarrassed reference to Australia’s good fortune in receiving ‘High prices for the things we sell overseas’.

Things? What are these ‘things’ that dare not speak their names? Poor Jim couldn’t bring himself to use the ‘f’ word for ‘fossil fuels’ or the ‘c’ word for coal which, along with gas, has delivered massive revenue windfalls and the first budget surplus in 15 years.

Like a latter-day Saint Augustine, Jim desperately wants to be pure – which according to the great green religion to which he subscribes means to stop emitting carbon dioxide – just not yet.

Luckily, Labor and China both seem to believe in only Western countries cutting emissions and Labor’s kowtowing has paid off. Exports to China have surged 31 per cent reaching $19 billion in March. This broke the previous record set in 2022, lifting Australia’s total trade surplus to $15.3 billion, the second highest on record.

Labor’s so-called ‘growth strategy’ is to make Australia ‘a renewable energy superpower’. Chalmers seems untroubled by the fact that to date there is no such thing. Even Norway which is blessed with cheap and abundant hydroelectricity makes itself wealthy by exporting oil.

Labor’s ‘plan’ is to ‘invest’ $2 billion in a new Hydrogen Headstart program, so Australia can be a ‘world leader’ in ‘producing and exporting hydrogen power’ while reducing emissions in heavy industry in Australia. It should be apparent to anyone with just a scintilla of economic literacy that any industry that requires $2 billion from the taxpayer to get off the ground is not economically viable.

The fact that two of Australia’s richest men – Andrew (Twiggy) Forrest (estimated to be worth over $30 billion ) and Mike Cannon-Brookes (estimated worth of about $26 billion) couldn’t make money out of a scheme to transfer solar power by cable from northern Australia to Singapore shows that even the massive subsidies for solar energy are not enough to bankroll a truly crazy proposition. Twiggy’s plan B to use the solar power to make green hydrogen is unlikely to be profitable either without another massive subsidy. Luckily for Twiggy he is almost certainly going to get one courtesy of Chalmers’ hydrogen thought bubble.

Chalmers claimed in the budget that, ‘Seizing these kinds of industrial and economic opportunities will be the biggest driver and determinant of our future prosperity’. No wonder Macquarie Bank, the so-called millionaires factory, and other wealthy investors are so green. What is renewable is not the source of energy but the source of the subsidy pumped straight from the pockets of taxpayers.

Late last year, Forrest’s privately owned Squadron Energy also paid around A$4 billion for Australia’s biggest wind energy company, CWP Renewables. As Warren Buffet said in the US, federal policies are the only reason to build wind farms.

In total the Budget allocates $4 billion towards making Australia a ‘renewable energy superpower’ bringing its total investment to more than $40 billion. This includes part of the $15 billion National Reconstruction Fund to support the development of green industries and a Capacity Investment Scheme to allocate $10 billion of investment to back up unreliable renewable energy projects with batteries, pumped hydro other storage technologies. Then there’s a $3 billion energy discounts program (shared with the states) to try to reduce energy bills by increasing insulation and driving people to use more (subsidised) renewable energy.

While taxpayer money is thrown at subsidising renewables, a so-called ‘Safeguard Mechanism’ will drive up the cost of reliable energy by taxing emissions. There is also an additional direct tax on the gas sector aimed at bringing in another $2.4 billion over four years.

All these extra taxes, subsidies, public sector agencies and additional investment explain why renewable energy is so expensive, putting upward pressure on prices, downward pressure on profits and ultimately sending businesses broke or offshore.

So while company tax receipts to March 2023 were $7.6 billion higher than expected at the mini-budget in October, they will peak at a bumper $138.4 billion this financial year, before falling as the economy is predicted to face the slowest global growth in more than two decades.

But that is only the start of the inflationary pressure. The budget’s $20 billion dollar spendathon is a massive economic stimulus, with $12 billion front-loaded into the next twelve months. That is almost guaranteed to mean at least another 0.5 per cent in interest rate rises.

Rising nominal wages will push people into higher tax brackets which will deliver much of the short-lived surplus yet it won’t be enough to cover Labor’s increased spending which bakes in the Liberals’ pandemic splurge and adds to it.

Average spending as a percentage of GDP will increase from 24.6 per cent under the Liberals before the pandemic to 26.5 per cent in 2023-24, and 26.8 per cent a year later. And that doesn’t include all the off-budget spending that Labor is planning for the NBN, housing and energy transmission.

When it became clear that England was going to lose the American colonies a young man wrote despairingly to Adam Smith, the father of economics, that the calamity spelt the ruin of the nation.

Smith replied calmly, ‘Be assured my young friend, there is a great deal of ruin in a nation.’ With its green dreams and spending sprees, we are going to find out just how much ruin Australia will tolerate before it shifts course.