Australia's unfair generational inheritance

The 2024-2025 Australian budget was very focused on the immediate, ‘a budget for the here and now’, targeted at the cost-of-living crisis, but despite many mentions of the future in the Treasurer’s speech, it is still not clear what current planning and policy holds for future generations and the crises they might face?

Griffith University researchers were in Canberra for a budget night analysis on the impact of the 2024-2025 Australian Federal Budget on Future Generations. The team, along with other members of the EveryGen analysed what some of the key budget issues might mean for a baby born on budget night 2024 – would they be happy or sad?

There weren’t many ‘happy babies’ in their analysis, but more importantly it provided many insights into how future thinking might be able to help us improve long-term approaches in budgets and avoid future crises.

We weren’t so concerned with winners and losers, but with providing a unique perspective on how the 2024-2025 federal budget would impact on someone born on budget day 2024 and what it meant for them.

Short termism

The federal budget lays out spending for the next financial year by portfolio and the costs of policies over the next four years in the forward estimates. It is major event on the federal political calendar and always results in furious analysis, usually in the form of reporting on the ‘Winners and Losers’.

In fact, in a peculiar tradition, journalists are ‘locked in’ – given a paper copy of the budget several hours before the formal announcement of the budget at 7:30 pm and are unable to leave Parliament (or more recently their offices) nor share the content in anyway. As a result, budget night is a furious rush to read and analyse the Budget and produce articles for the next day’s media cycle. While the Griffith team didn’t join a formal ‘lock up’ but hosted their own in Canberra – downloading and analysing the budget as the Treasurer Dr. Jim Chalmers gave his speech. We weren’t so concerned with winners and losers, but providing a unique perspective on what someone born on budget day might feel about the what the budget means for them.

Of course, the budget is not (nor should be) written only with future generations in mind. Many budget items are to address immediate problems, such as energy rebates to ease cost of living. However, some budget items are inherently long-term, particularly defence spending which can have decade-long timeframes, as with the AUKUS submarine agreement. And many budget measures have implications long into the future, whether or not this is the explicit focus.

This longer-term focus is important for several reasons. Complaints of the ‘short termism’ of policy is an all-too-common refrain, with policy driven by 3–4-year electoral cycles more that the issues of the day. Crucially, some of biggest challenges we face today – climate change, biodiversity loss, pollution – are issues that have massive impacts long into the future – 50, 100 or even 1000-year timescales. A long-term view can even help current generations – might we have avoided a housing crisis if we had taken a longer-term view 20 years ago?

What if instead of $300 electricity bill rebates paid to every household, the government had invested in thermal efficiency upgrades, electrification and rooftop solar for people on low-incomes, who could then save up to $6,000 annually on their home energy bills according to ACOSS. Would it grab the headlines? Add inflationary pressure? Win an election? But might it be better for future generations is a question rarely asked.

A future generations budget analysis

EveryGen team’s analysis looked at defence, housing, tax, infrastructure, mental health and the ‘Future Made in Australia’ policy, as well as considering broader issues such as climate change and the environment. It is very noticeable from the analysis that climate change and environmental issues are not front and centre of the budget despite being vital when thinking about the future and intergenerationally – and this results in a number of sad babies.

For example, the Government’s stated ambition is to build 1.2 million houses in the next 5 years. But our future generations analysis shows that ultimately, this budget will likely create a whole new and different housing crisis for a baby born on Budget night. There is no mention of climate change, sustainability (in the context of climate change, Sustainable Development Goals or environment), adaptation, mitigation or transition mechanisms in the context of energy efficiency, which means that there are no assurances that future generations will be provided with adequate, sustainable, or resilient homes.

In terms of transport infrastructure, locking future generations into a car dependency by over-prioritising roads ahead of active travel and public transport is neither sustainable nor healthy for them, and potential climate impacts make it even worse should we fail to, or even be slow to, electrify road transport.

Defence spending is important because of the potential existential risks now and into the future, but the commensurate risk of climate change is far higher – we know the impacts are coming, compared to the highly uncertain risk of an invasion or major war occurring. Yet climate change does not receive anything like the same budget.

Analysis of the tax cuts might provide some immediate relief on the cost of living, but these impacts are unlikely to affect future generations. More ambitious systemic changes are needed to make the tax system work more fairly for those being born today.

Even the Future Made in Australia, which is focused investment in green and decarbonisation industries, might not do well in a future generations analysis. The budget has little to nothing for conserving the environment and biodiversity or addressing threats to it. Green industries are important for the future, an environment that can sustain us is even more so, but is under severe threat. Helping one without the other does not serve future generations well.

How to take the long-term view?

We argue that the Federal Treasury should provide an accompanying Budget Analysis Statement that helps Australian citizens understand:

How future trends and scenarios should be influencing investment decisions for the long term;
How investment in prevention should be happening across Government; and
How system-wide, integrated approaches can be facilitated through budget decisions.

We have asked these questions based on the Welsh Future Generations Act methodology and we used the 2023 Intergenerational Report on future trends and Measuring what Matters frameworks (for system-wide integrated approaches) as our guide. There is no current methodology used by the Australian government for investment in prevention although there are key policies on disaster risk reduction preventative health. There are also plans for a National Climate Risk Assessment.

Thinking about future generations brings to the fore issues that we might otherwise not prioritise or address appropriately. It highlights key threats to systems that can be easily overlooked as we try to just manage our short-term issues, such as the climate and ecosystems. It shows us where our current thinking is locked into a status quo that is not suitable for addressing the challenged we face. Not every budget need be transformational, but we will need to transform what we do if we are going to give future generations reason to be happy with us.

EveryGen, convened by the Policy Innovation Hub at Griffith University, is a coalition of multidisciplinary policy experts collaborating to create an equitable, just and transformative path towards intergenerational justice. Collaborators include Australian National University and Foundations for Tomorrow.