The Budget – Beyond Economic Units

The 2018 federal budget is about winning a contest and getting re-elected writes David Crosbie, CEO of the Community Council for Australia.

When I listened to the prime minister and the treasurer in their post-budget sales job, one of the most common phrases I heard was “Bill Shorten and the ALP”. It is almost like ALP policies are the reference point for the government in framing all their political talking points. The take home message we receive, either directly or indirectly, is that this is a budget about winning a contest, about getting re-elected.

And when it comes to the contest for power, this government seems to have adopted a relatively simple approach: it is embracing the old adage that if you have a two-horse race and one of the horses is called self-interest – back it.

Tax cuts for business and for some individual taxpayers are the real centrepieces of this budget.

The modest immediate tax cut for low to middle income earners of up to $10 a week paid in a lump sum in 2019 will appeal to many. The proposed flat tax structure for anyone earning between $40,000 and $200,000 will appeal to more as it translates into a much larger tax cut for those earning higher incomes. The caveat here is that no one is overly confident about the seven-year wait for this measure.

The tax cuts to business are touted as creating a stronger economy and more jobs, despite the lack of evidence for either outcome from economists or from the real world findings in countries around the world where business tax cuts have been provided. But they will appeal to businesses who can increase their profits and offer greater benefits to shareholders.

Most of the other new spending measures tend to be in the form of grants to particular areas or organisations or (new) infrastructure projects. Most have been well canvassed in Pro Bono News, and most are worthy additions to government expenditure – like the increased funding for mental health programs and aged care capital infrastructure.

But all too often, this one-off grant approach operates within a vacuum, ignoring the kind of longer-term structural changes and reform that are required to sustain improvements in government supported services.

The 14,000 new home care packages for the aged are a good example. It seems like a good measure – helping older Australians stay in their homes longer with additional support. Many groups welcomed the measure and commentators acknowledged it as a positive initiative. The problem is that over 100,000 aged Australians are currently not getting the home care packages they are entitled to – most are on a waiting list that grew by 20,000 in the last six months of 2017.

There is no new separate line item for increased expenditure associated with this measure suggesting it will come from the existing aged care budget – possibly re-allocating a previous underspend in areas like residential care. And there is no reform of the fundamental blockages in the system. As a consequence, thousands of older Australians assessed as being eligible for high-level home care packages will continue to wait 12 months or more for their services. As anyone who has been in this situation knows, the inability to receive appropriate support in the home leads to increased hospital admissions and increased admissions to nursing homes because without the home support, an older person that needs these services is often not safe.

This is just one example of how headline figures in federal budgets do not always translate into benefits for those they appear to target, but they still make for good political talking points.

It is also important to note that there are cuts in this budget that seem contrary to any sensible analysis of Australia’s longer-term interests, particularly internationally. Why, for instance, would a government cut $60 million from support for high achieving student international exchange programs? Why cut Australia’s international assistance (overseas aid) a further $141 million? The messaging is that these programs are not priorities. We should read this as meaning these programs are not political priorities.

This is my biggest concern about this federal budget and the budget process more generally. When politics dominates, when popularism and nationalism are in ascendancy, good policy making is diminished.

If a federal budget does nothing in areas like housing, the environment, international assistance and collaboration, working with the marginalised, promoting the arts, increasing school readiness and retention rates, health promotion and prevention programs, or better management of chronic health needs, can it be called a good budget? Will increased business profits provide sustained new investment in these critical areas of community life?

This budget not only backs self-interest over community interest, but also seeks to conflate the two together – if business does well, we all do well.

As Rev Tim Costello (chair of CCA and chief advocate for World Vision) said in the foreword to the Australia We Want first report: Many discussions about Australia’s future are focused on our economy, not our lives, our relationships or the country we want to live in. We are much more than passengers in an economy.

The federal budget is the most important policy statement of any government. What this budget says is that our democracy is suffering, and charities in many areas of Australian life will have to increase their advocacy if we are to achieve the Australia we want.

About the author: David Crosbie is CEO of the Community Council for Australia. He has spent more than 20 years as CEO of significant charities including five years in his current role, four years as CEO of the Mental Health Council of Australia, seven years as CEO of the Alcohol and other Drugs Council of Australia, and seven years as CEO of Odyssey House Victoria.

David Crosbie writes exclusively for Pro Bono News on a fortnightly basis, covering issues of importance to the broader not-for-profit sector.