With the 2018-19 Federal Budget freshly released, Griffith University asked some of its foremost experts about a range of crucial social and political issues to offer their analysis of the shape Treasurer Scott Morrison’s ledger has taken.

See below for a summary of key cornerstones of this year’s Budget, and use the links to read more commentary from our academics.

Dr Andreas Chai — Overview

1999 was a great year to be alive in Australia. Apart from Prince hitting the airwaves again, Powderfinger were still playing and topped the Hottest 100, the first Matrix movie was released and you could still get a flat white for under three dollars. In terms of the Federal Budget, 1999 marked the start of a remarkable period in which the Federal Budget accumulated approximately $90 billion dollars between 1999-2008.

2018 is starting to look a lot like 1999, at least in terms of international commodity prices. While global growth remains sluggish and domestic business investment is stuck in a low gear, the underlying cash balance of the Federal Government is projected to reach surplus in the coming quarters thanks to the strong performance in commodity prices, such as an iron ore.

Read more from Dr Chai→

Professor Fabrizio Carmignani — Economics

The context of this federal budget is characterised by a favourable alignment of political and economic incentives. Given 2018 is an election year, the political incentive for the government is to strengthen its consensus by adopting “expansionary” budget measures such as lowering taxes and increasing expenditure (possibly targeted to key constituencies). At the same time, with the Australian economy still running below potential, these same expansionary measures will help stimulate aggregate demand and close the gap between actual and full-employment potential Gross Domestic Product.

This alignment of incentives means that the government does not have to choose between what is good for the economy and what is politically convenient.

Read more from Professor Carmignani→

Professor David Grant — The Banks and Financial Services

Last year’s Federal budget produced an unwelcome surprise for the major banks in the form of the Banking Levy. The cries of pain from those affected are now long since forgotten and any remaining sympathy for their situation has dissipated given what has been uncovered by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. With the Commission revealing what is seemingly a systemic problem in the industry, attention has now turned to whether and how the banks and other major financial institutions might be penalised and further regulated.

Against this background, the 2018 budget becomes all the more interesting; not because it does anything to single out the banks and others in the financial services sector for special (punitive) treatment as a response to their wrongdoings highlighted by the Commission, but rather because the budget is likely based on economic modelling and forward estimates that assume the sector to be in robust financial health. And that is a potential problem.

Read more from Professor Grant→

Professor Christine Smith—Regions

Although the 2018 budget has been portrayed as one which seeks to shore up electoral support for the government in the context of an impending election, there is not a great deal of additional money being promised for expenditure programs in non-metropolitan Australia.

There is a continuation of the Building Better Regions Fund, the Stronger Communities Program, the Roads to Recovery Program, the Black Spots Program, the Bridges Renewal Program and the National Highway Upgrade Program. However, there are no major increases in funding for these programs in the 2018-19 financial year.

There have been a number of major infrastructure projects announced and these will be very much welcome in the affected regions; however, the majority of the big-ticket items in this area are targeted at congestion-busting in greater metropolitan regions.

Read more from Professor Smith→

Professor Paul Burton — Cities

The problem with funding for cities is that it’s everywhere and nowhere. A great range of spending measures have an impact in and on cities, whether in terms of direct spending on urban infrastructure or less directly on people who happen to live and work in cities, and that represents about 90% of us.

But is that spending on public services and investment in infrastructure guided by a national policy for cities? Unfortunately, no.

Read more from Professor Burton→

Professor Andrew O’Neil — Defence and Security

The 2018 Federal Budget endorses another positive year of outlays for the Defence portfolio and security more broadly. The Defence Portfolio Budget Statement confirms that the Turnbull Government has authorised growth in real terms, which equates to 1.9% of GDP.

The Abbott Government’s commitment in 2014 to endorse an expenditure target in the Defence portfolio of at least 2% of GDP per annum by 2020-21 has meant this area of the budget has effectively been ring-fenced from cuts. The ambitious strategic guidance laid out in the 2016 Defence White Paper (DWP), coupled with signs of a deteriorating security environment in Asia, has reinforced the logic of this in the eyes of senior policy makers, and it’s unlikely this would change in the event a Labor Government was elected.

Read more from Professor O’Neil→

Associate Professor Albert Gabric – Great Barrier Reef

Researchershave recognised for over 25 years that poor water quality due to land use change and farming in the coastal hinterland is fundamentally incompatible with a healthy coral reef ecosystem.

The language in recent reports mentions maintaining and improving the reef’s resilience, even though the general concept of ecosystem resilience is difficult to define and even more difficult to measure.

The proposed Budget allocation of $500 million, while certainly welcome, is a very small step in confronting a classic “wicked problem”, which is by definition extremely difficult or impossible to solve.

Read more from Associate Professor Gabric→

Professor Patrick O’Leary—Society

The 2018-19 Federal Budget has the opportunity to make a social impact on equity, safety and restitution to people disadvantaged structurally by violence. Over the past five or so years, there has been significant attention to ravages of violence and abuse, particularly on children and women across the life course. The costs to society and restraint on human potential can never be underestimated.

History will see this era as revolutionary in awareness, but will it be disappointed by action? The Federation of Australia has a rare opportunity to say it has learnt from the past by showing it is acting for the future by resourcing innovation to prevent and respond to violence.

Read more from Professor O’Leary→

Dr Parvinder Kler—Unemployment

Long-term unemployment in Australia has increased since the Global Financial Crisis, ticking up from 14.8% of the total unemployed in January 2008 to 23.8% in March 2018 (Australian Bureau of Statistics). These figures mask (i) geographical variations whereby long-term unemployment is more pronounced in regional areas, (ii) age profiles, with older unemployed Australians finding it harder to gain employment, both of which are partially attributed to (iii) structural change within the Australian economy that has eschewed manufacturing and more labour-intensive jobs requiring less formal education to a more services-oriented economy that increasingly favours the educated and indeed female labour market entrants.

Thus, governmental response needs to be multi-faceted. Re-training programs have been a global staple of government intervention in equipping the longer-term unemployed to find work but it is a policy that has evinced very mixed results. A more holistic package of ‘re-inventing’ the long-term unemployed is needed, one which provides the recipient with a host of options to choose from.

Read more from Dr Kler→

Dr Liam Wagner—Energy

The 2018 Federal Budget includes incentives for the energy sector with the further development of coal, oil and gas. However, a lack focus on oil security diverts energy policy debate away from the availability of our energy supplies and onto back-pocket affordability. Oil supplies barely rated a mention in the 2018 Budget.

But,despite repeated warnings via the 2004 Energy White Paper and the more recent 2016 Defence White Paper, Australia has not maintained a sufficient oil reserve for 80 of the last 91 months.Despite the recent rediscovery of this issue by members of the government, little has been done in the past 14 years to increase our strategic oil supplies.

Read more from Dr Wagner→

ByProfessor Christine Smith, Portfolio Director, Research and HDR, Griffith Business School

Although the 2018 budget has been portrayed as one which seeks to shore up electoral support for the government in the context of an impending election, there is not a great deal of additional money being promised for expenditure programs in non-metropolitan Australia.

There is a continuation of the Building Better Regions Fund, the Stronger Communities Program, the Roads to Recovery Program, the Black Spots Program, the Bridges Renewal Program and the National Highway Upgrade Program. However, there are no major increases in funding for these programs in the 2018-19 financial year.

There have been a number of major infrastructure projects announced and these will be very much welcome in the affected regions; however, the majority of the big-ticket items in this area are targeted at congestion-busting in greater metropolitan regions.

The most significant new item is the Roads of Strategic Importance initiative aimed at upgrading key freight routes and getting products to market in a more cost-effective manner, and this is also backed up by the commencement of construction of the Inland Rail project from Melbourne to Brisbane.

Announcements of which projects will be funded as part of a number of the continuing programs mentioned above (e.g. the Building Better Regions Fund) will be forthcoming later in the financial year and so it is not possible as yet to provide a detailed analysis of which regions are net losers or net winners. However, in aggregate it is difficult not to conclude that since the balance of power in the federal arena has shifted away from a handful of regional politicians the infrastructure budget spend has become more geographically neutral.

Back to Griffith University’s Budget 2018 Portal

By Dr Parvinder Kler, Program Director, Bachelor of Commerce, Griffith Business School

Long-term unemployment in Australia has increased since the Global Financial Crisis, ticking up from 14.8% of the total unemployed in January 2008 to 23.8% in March 2018 (Australian Bureau of Statistics). These figures mask (i) geographical variations whereby long-term unemployment is more pronounced in regional areas, (ii) age profiles, with older unemployed Australians finding it harder to gain employment, both of which are partially attributed to (iii) structural change within the Australian economy that has eschewed manufacturing and more labour-intensive jobs requiring less formal education to a more services-oriented economy that increasingly favours the educated and indeed female labour market entrants, not to mention the arrival of the so-called fourth industrial revolution driven by technology that has swept quickly through the global economy, creating havoc on jobs and employment.

Thus, governmental response needs to be multi-faceted. Re-training programs have been a global staple of government intervention in equipping the longer-term unemployed to find work but it is a policy that has evinced very mixed results. A more holistic package of ‘re-inventing’ the long-term unemployed is needed, one which provides the recipient with a host of options to choose from.

A holistic package could include measures that subsidise formal education, incentives to employers to re-train recipients, special government assistance grants to those in regional areas who may need to relocate to urban centres, more tailored education and training strategies for those structurally unemployed (mainly older Australians trained for an increasingly outdated economic model) and even gender-sensitive options, given Australia’s highly gender-segregated labour market.

Finally, it should also acknowledge the significant change in the economy by assisting willing recipients become entrepreneurs given the ease at which technology adoption allows individuals to buy and sell products and services by-passing the usual channels of retail shops. A ‘one-stop centre’ should be created specifically to cater for long-term unemployed where all their queries and assistance afforded to them can be made in a manner that maximises positives at minimal cost.

All of this, of course, requires funding, and recent governmental protestations of better times ahead notwithstanding, budgetary commentaries have been heavily laced with arguments of fiscal restraint. This is an opportune time then to remind everyone that policies to improve employment outcomes should be viewed as providing benefits above and beyond the costs of such policy implementations. Indeed, this will also reduce the associated and indirect costs of long-term unemployment such as increased mental stress, overall deleterious health outcomes and negative societal outcomes that further exacerbate the cost of unemployment on families, communities, the economy and ultimately the budget.

It is imperative that governments at all levels view this as an investment with a short-term up front cost, but one that brings about longer-term returns to investment. A caveat to this is that ‘it’s the economy, stupid’ reminder. No amount of good policies on the amelioration of long-term unemployment will work if the economy itself does not improve, and this is especially true of regional Australia, which is often ignored in such debates.

Back to Griffith University’s Budget 2018 Portal

ByDr Liam Wagner, Professor of Economics, Griffith Business School

The 2018 Federal Budget includes incentives for the energy sector with the further development of coal, oil and gas. However, a lack focus on oil security diverts energy policy debate away from the availability of our energy supplies and onto back-pocket affordability. Oil supplies barely rated a mention in the 2018 Budget and most notably there will be:

While the geopolitical chess game grows in its complexity, South Korea, Iran and disputes in the South China Sea will become more important to everyday cost of living. Australia imports 75% of its petroleum needs and the vast majority of its refined gasoline and diesel.

Most notably, South Korea is our largest supplier of refined petroleum products, which travel via the South China Sea to reach our shores. Furthermore, around 30% of the world’s crude oil supply travels through the Strait of Hormuz, right next door to Iran. If one or all of these hot spots became the centre of regional security concerns, we could see $10/L petrol prices and the rationing of petrol.

Oils ain’t oils, there’s a looming crisis.

Importing the majority of our oil shouldn’t be a problem with alternative supplies, like those mandated by the International Energy Agency (IEA), who require a 90-day supply stockpile.

However, since 2004, it has been widely known that the retirement of oil refining capacity could be a looming problem for Australia’s energy security. The closure of the Shell Clyde refinery in 2012 marked the end of Australia’s ability to comply with the 90-day IEA supply requirements. Furthermore, the ageing fleet of oil refineries have struggled to compete with SE-Asian competitors, and our continued reliance on imports shows its strategic frailty.

Despite repeated warnings via the 2004 Energy White Paper and the more recent 2016 Defence White Paper, Australia has not maintained a sufficient oil reserve for 80 of the last 91 months. Despite the recent rediscovery of this issue by members of the government, little has been done in the past 14 years to increase our strategic oil supplies.

Why should I care?

Because everywhere you go and everything you eat requires oil.

Unfortunately, we have still yet to find a replacement for the 120+ products derived from a barrel of oil, let alone electrified all road transportation. Oil will be a significant factor in everyday life for some time and, without the proper management of energy security, we may be in some trouble. The continued inability to maintain adequate oil supplies could result in $10/L petrol prices, greatly affecting food prices and the availability of medication.

What should the government do?

While increased reporting of oil stocks and excess storage capacity by producers, marketers and large users will improve our ability to release supplies during a crisis, there are still four key recommendations which could be implemented in Australia:

  1. The Australian government can divert funds from fuel excise charges to build oil storage;
  2. Develop an Energy Security Ombudsman;
  3. Adopt the French model of requiring petrol companies to have an additional 10-15% storage above market requirements;
  4. Require greater strategic storage by large users of oil products.

Back to Griffith University’s Budget 2018 Portal

By Professor Patrick O’Leary, Professor of Social Work, School of Human Services and Social Work

The 2018-19 Federal Budget has the opportunity to make a social impact on equity, safety and restitution to people disadvantaged structurally by violence. Over the past five or so years, there has been significant attention to ravages of violence and abuse, particularly on children and women across the life course.

The costs to society and restraint on human potential can never be underestimated. Rosie Battie was Australian of the Year in 2015 on the basis of her lived experience of domestic violence and her activism to bring about change. Former Chief of Defence David Morrison followed as Australian of the Year on the basis his efforts to challenge gendered violence and raising societies recognition of discrimination and sexism. December 2018 saw the recommendations of the Royal Commission into Institutional Responses to Child Sexual Abuse, after a watershed period in uncovering some of the darkest secrets of institutional failure to protect children.

Knowing what we know now, what does the Commonwealth owe the public in terms of bringing findings and recommendations to action? To date there has been little or no acknowledgement of the implications for the Budget to honour the Royal Commission’s recommendations or the ongoing development of domestic violence intervention and prevention initiatives.

History will see this era as revolutionary in awareness, but will it be disappointed by action? The Federation of Australia has a rare opportunity to say it has learnt from the past by showing it is acting for the future by resourcing innovation to prevent and respond to violence.

“The Federal Budget faces challenges in preventing further conditions that allow violence to be perpetrated with a sense of impunity.”

At this Federal Budget, Australian society faces some of the most critical social issues in relation to gender-based violence of its time, and not because these are new issues; rather, we now have unprecedented knowledge. These are times when governments can no longer ignore or see issues of violence and abuse as impacting on a marginalised few. The Royal Commission into Institutional Responses to Child Sexual Abuse lifted the cover on how the safety of children was ignored and trivialised; a similar story has been seen in institutions for disability, mental health and Indigenous ‘welfare’.

There are complex demands on the Federal Budget to respond to the most vulnerable in society, but this time is different because we know more, and communities are compelled to act. Not only to address the wrongs of the past but to change the pattern of how problems such as domestic violence occur in the first place.

Aged care is a particular concern, with rising rates of institutionalisation. Increased demand in aged care has seen a boost in funding. However, have we really learnt about the intersectionality of problems? The Federal Budget faces challenges in not only acting on the impact of past abuse but preventing further conditions that allow violence to be perpetrated with a sense of impunity. We have knowledge on the intractability of allowing institutions to act by proxy for the care and protection of society’s most vulnerable. Services for the elderly is a major challenge but ‘old’ thinking on how to respond will be fraught if not tempered with what we know from past ills.

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By Professor Paul Burton, Director, Cities Research Institute

The problem with funding for cities is that it’s everywhere and nowhere. A great range of spending measures have an impact in and on cities, whether in terms of direct spending on urban infrastructure or less directly on people who happen to live and work in cities, and that represents about 90 per cent of us. But is that spending on public services and investment in infrastructure guided by a national policy for cities?

Unfortunately, no.

What passes for a national debate about the pros and cons of a ‘big Australia’ often touches on productivity and the changing dependency rate brought about by an aging population but the design and location of major urban infrastructure is by the far the most important element to consider.

Our major cities are struggling to cope with population growth as house prices move beyond the reach of new households, unless they are willing to trade affordability for punishing daily commutes to the job hotspots that remain in their CBDs. And many of our schools and hospitals have reached capacity.

There is little or no appetite in government for fundamental tax reform, including in the areas that affect our built environment. Negative gearing and capital gains tax reform are off-limits and the recent RBA report on the costs of ‘zoning’ suggest that Federal and even State governments remain convinced that less rather than more planning is the answer to managing our expected growth.

But to manage the growth of our existing major cities and to help others transition from small to larger cities, we need more planning. We do not need more detailed regulation of every development application, but all levels of government need to be aware of the spatial consequences of their spending decisions.

If the budget signalled new approaches to assessing major infrastructure projects so that they could be judged by how well they supported a national urban growth management plan, then the whiff of the pork barrel might be replaced by the sweeter smell of sensible planning.

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By Professor Andrew O’Neil, Dean (Research), Griffith Business School

The 2018 Federal Budget endorses another positive year of outlays for the Defence portfolio and security more broadly. The Defence Portfolio Budget Statement confirms that the Turnbull Government has authorised growth in real terms, which equates to 1.9% of GDP.

The Abbott Government’s commitment in 2014 to endorse an expenditure target in the Defence portfolio of at least 2% of GDP per annum by 2020-21 has meant this area of the budget has effectively been ring-fenced from cuts. The ambitious strategic guidance laid out in the 2016 Defence White Paper (DWP), coupled with signs of a deteriorating security environment in Asia, has reinforced the logic of this in the eyes of senior policy makers, and it’s unlikely this would change in the event a Labor Government was elected.

“Australia currently outlays around $35 billion per year on Defence.”

As in previous years, the primary outlays in the Defence portfolio are fixed personnel costs, continuing global operations, and phased capability acquisitions through the Integrated Investment Plan (IIP). Released in sync with the 2016 DWP, the IIP allocates in excess of $50 billion over the forward estimates (i.e. the three years beyond the current budget) and $200 billion in capital investments over the next decade.

At least one-quarter of this spending will be devoted to underwriting the construction of a dozen new generation submarines and covering the increasingly opaque costs of the F-35 Joint Strike Fighter Program. To put this into perspective, Australia currently outlays around $35 billion per year on Defence, so it’s easy to see the central role of capability acquisitions in shaping — and in some cases blowing out — defence expenditure over time.

One new initiative in this year’s budget that has already received some coverage is the Turnbull Government’s decision to invest $50 million in seed funding for an Australian Space Agency. Its creation was announced last year, and while Education Minister Simon Birmingham is on the record as saying that ‘it’s not NASA’, the new agency will inevitably have a defence and intelligence function simply because of its involvement in the various dual-use domains of satellite technology.

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By Associate Professor Albert Gabric, Director, Master of Environment Program, School of Environment and Science

Some indisputable facts about the Great Barrier Reef:

These threats to the GBR have been the subject of several major government studies in the last 20 years, including theIndustry Commission Report (2003) and Reef 2050 Long-Term Sustainability Plan (2017). The latter report stated:

Some context: Queensland has the largest area of agricultural land of any Australian state and the highest proportion of land area in Australia dedicated to agriculture. Agricultural industries contribute more than $10 billion to the state’s economy each year.

Researchershave recognised for over 25 years that poor water quality due to land use change and farming in the coastal hinterland is fundamentally incompatible with a healthy coral reef ecosystem.

The language in recent reports mentions maintaining and improving the reef’s resilience, even though the general concept of ecosystem resilience is difficult to define and even more difficult to measure.

The proposed Budget allocation of $500 million, while certainly welcome, is a very small step in confronting a classic “wicked problem”, which is by definition extremely difficult or impossible to solve.

Back to Griffith University’s Budget 2018 Portal

By Professor David Grant, Pro Vice Chancellor (Business), Griffith Business School

Last year’s Federal Budget produced an unwelcome surprise for the major banks in the form of the Banking Levy. The cries of pain from those affected are now long since forgotten and any remaining sympathy for their situation has dissipated given what has been uncovered by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. With the Commission revealing what is seemingly a systemic problem in the industry, attention has now turned to whether and how the banks and other major financial institutions might be penalised and further regulated.

Against this background, the 2018 budget becomes all the more interesting; not because it does anything to single out the banks and others in the financial services sector for special (punitive) treatment as a response to their wrongdoings highlighted by the Commission, but rather because the budget is likely based on economic modelling and forward estimates that assume the sector to be in robust financial health.

And that is a potential problem.

Already, extra jobs and a stronger-than-anticipated economic performance have bolstered tax receipts by nearly $5 billion more than estimated in the mid-year review last December, and the expectation is for the budget to return to the black sooner than previously forecast. At the same time, the government is predicting that a cut in the company tax rate will lead to greater economic output, increased employment and higher wages, and that with this growth will come increases in government revenue. Confidence in these predications is what has enabled the government to announce that it will no longer seek to increase the Medicare levy in order to support the NDIS, and has provided it with room to increase expenditure across portfolios whilst also delivering income tax cuts to low- and middle-income earners.

“…it is not unreasonable to assume that there will be some significant fallout in relation to the financial performance of the industry in the next few years.”

But with the banking and financial services sector in disarray — and further revelations about malpractice no doubt likely to emerge as the Royal Commission rolls on this year — it is not unreasonable to assume that there will be some significant fallout in relation to the financial performance of the industry in the next few years. Not least, a lack of public trust and confidence in financial products and services may see a downturn of sales and activity. Furthermore, it is likely that the Commission will hand down recommendations that lead to a more stringent regulatory environment that includes bigger financial penalties for misconduct and which will substantially increase compliance costs within the industry. All this could impinge on performance and profitability in banking and financial services for at least the short to medium term, and lead to (notably overseas) investor nervousness in the sector. One could even go further seeing a downturn in the sector’s performance impacting on the financial markets and the economy overall.

Such a scenario has implications for how we view the 2018 budget. The Government is aiming to return to a budget surplus of about 0.5 per cent of GDP. That for some — including Labor — is believed to be too slim and leaves the economy vulnerable to economic volatility. Notwithstanding the planned cut in the corporate tax rate — and there is an argument that this may be of vital assistance to banking and financial services given what else may be coming down the line for it — the budget is, at least in part, based on a revenue base that assumes continuation of the recent strong performance of the sector. These calculations may not though take into account any possible downturn in economic activity in the sector and the impact of this on government revenue.

In short, if the budget is based on economic modelling and forward estimates that assume things will continue as they are in the banking and financial services sector and not as they could turn out to be, that could be bad news for the government’s delivering on what they have promised and its capacity to secure budget repair.

So while we may all agree that the Royal Commission will achieve a great deal and was long overdue, there may, in the context of the 2018 budget, be a significant price to pay for what it has revealed.

Back to Griffith University’s Budget 2018 Portal

By Professor Fabrizio Carmignani, Dean (Academic), Griffith Business School

Professor Fabrizio Carmignani, Head of Department of Accounting, Finance and Economics.

The context of this federal budget is characterised by a favourable alignment of political and economic incentives. Given 2018 is an election year, the political incentive for the government is to strengthen its consensus by adopting “expansionary” budget measures such as lowering taxes and increasing expenditure (possibly targeted to key constituencies). At the same time, with the Australian economy still running below potential, these same expansionary measures will help stimulate aggregate demand and close the gap between actual and full-employment potential Gross Domestic Product.

This alignment of incentives means that the government does not have to choose between what is good for the economy and what is politically convenient. The only possible downside risk is that by engaging in expansionary measures, the government could compromise its fiscal consolidation strategy and hence disrupt the path towards a fiscal surplus. However, the estimates available from the Mid-Year Economic and Fiscal Outlook 2017-18 and the IMF Article IV Consultation released earlier in 2018 project a steady increase in fiscal revenues, which in turn creates the fiscal space for expansionary measures.

In other words, when he took the stage, Treasurer Scott Morrison was in a truly advantageous position: he had the fiscal space to deploy the expansionary measures required to support the economy and increase consensus for its government in an electoral year. The only thing he had to do was to deliver these measures convincingly.

Did he? My answer would be: to some extent, but not in full.

“…this budget missed the opportunity to promote more drastic interventions to support employment.”

The budget does include some “textbook” expansionary measures, above all the cut in the personal income tax rate for low and middle incomes coupled with a generous allocation to expenditure in infrastructure. Lower personal income taxes are expected to stimulate private consumption, even if it is to be seen how significant the impact of the measures proposed in the budget will be. Spending on infrastructure is always popular among Treasurers, and this time it looks like a sizeable share is coming to Queensland.

In addition, the proposed investments in age care, mental health care, and medical research are welcome examples of how the government is trying to strengthen the supply of some public goods that are needed for long-term inclusive growth. On the other hand, given the favourable context, this budget could have done more to support education, particularly after the interventions introduced in December 2017.

On the negative side, this budget missed the opportunity to promote more drastic interventions to support employment, such as active labour market policies that encourage requalification and mobility of workers across sectors and regions. These policies would have also been useful in a longer-term perspective to support the process of structural transformation of the Australian economy.

Similarly, the budget contains only limited provisions to promote regional development, which is a concern given that inequality in Australia has a strong geographical dimension. Finally, the continued commitment of the government to the corporate tax cut is not good news, as this measure is unlikely to stimulate the real economy while it does contribute to sharpening inequalities.

Back to Griffith University’s Budget 2018 Portal