tag:theconversation.com,2011:/africa/topics/budget-repair-30912/articlesBudget repair – The Conversation2023-04-20T10:32:03Ztag:theconversation.com,2011:article/2041932023-04-20T10:32:03Z2023-04-20T10:32:03ZGrattan on Friday: The government invited ambit claims for the budget and now it will be judged against them<p>Budgets are for stakeholders and interest groups like Christmas is for kids. They’re preceded by a multitude of letters to “Santa”, aka the treasurer, in the run-up. </p>
<p>For the May 9 budget, two key correspondents were appointed by the government itself. This week, the wish lists from the Economic Inclusion Advisory Committee and the Women’s Economic Equality Taskforce were released. </p>
<p>The inclusion committee, an ongoing body to review the adequacy of welfare support, was born out of a demand to Prime Minister Anthony Albanese from Senate crossbencher David Pocock last year, in exchange for his vote on the government’s industrial relations legislation. </p>
<p>It was always clear the committee would confront the government with more demands than could be met, and that would become a political challenge. </p>
<p>The taskforce, chaired by businesswoman and gender equity advocate Sam Mostyn, was set up to reflect the government’s desire to underline its policy tilt towards women. </p>
<p>Managing expectations before a budget is always tricky, and these committees are making this especially so for Treasurer Jim Chalmers ahead of his second budget. </p>
<p>The message from Chalmers is that funds are limited and the government can’t do all it might like to do (let alone all that others might want it to do). </p>
<p>Indeed, Chalmers is trying to find ways to constrain spending – to allow maximum room for budget repair – rather than expand it. </p>
<p>The Minister for the National Disability Insurance Scheme, Bill Shorten, this week outlined areas for reform of the NDIS to get it “back on track”. While Shorten stresses this is about improving outcomes, everyone in government knows the NDIS’s costs must be contained or the scheme will be totally unsustainable. </p>
<p>On Treasury figures, the inclusion report’s recommendations would cost more than $34 billion over the forward estimates.</p>
<p>The government has indicated it expects to adopt some of the proposals. But it has already shied away from the biggest one: a large increase in JobSeeker, which the report says should be taken to some 90% of the age pension (at a cost of $24 billion over the forward estimates). </p>
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Read more:
<a href="https://theconversation.com/boosting-jobseeker-is-the-most-effective-way-to-tackle-poverty-what-the-treasurers-committee-told-him-204045">Boosting JobSeeker is the most effective way to tackle poverty: what the treasurer's committee told him</a>
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<p>That would restore the relativity of the mid-1990s. At present, the rate for singles is about 65% of the age pension.</p>
<p>Among the things on the “urgent” list of the women’s taskforce are reinstatement of the parenting payment (single) for women with children aged over eight, abolition of the childcare subsidy activity test, and investment in “an interim pay rise for all early childhood educators”. </p>
<p>Despite the government ruling out the “large” increase in JobSeeker, it is still possible the budget could make some change to it, among other pickings from the inclusion report. </p>
<p>Similarly, the government could take up the reinstatement of the parenting payment (single), for which there is considerable pressure. </p>
<p>The inclusion committee is chaired by former Labor minister Jenny Macklin, who has an extensive background in welfare policy, and includes substantial expertise among its members. Its report contains a plethora of detail and it is closely argued. </p>
<p>The report’s lens is squarely focused on issues of adequacy and poverty. While it says its JobSeeker recommendation would not be a significant discouragement to seeking paid work (and the current low rate is a barrier to doing so), some believe the recommended big lift would indeed create a disincentive in our present full employment labour market. </p>
<p>Many people, especially in Labor’s base, will see this report as a benchmark for what a Labor government should do to promote fairness for those at the bottom and create a more equitable society. The same applies with the women’s taskforce measures.</p>
<p>In that sense, the budget must inevitably fall short of the tests these reports pose for it. </p>
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Read more:
<a href="https://theconversation.com/grattan-on-friday-chalmers-grapples-with-a-budget-where-economics-and-politics-pull-in-different-directions-203759">Grattan on Friday: Chalmers grapples with a budget where economics and politics pull in different directions</a>
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<p>Commentators have already suggested a parallel, of sorts, between the proposed Indigenous Voice to Parliament and the inclusion committee. The comparison is a very long stretch, but in each case, special access is involved but the government isn’t bound by recommendations. </p>
<p>What we are seeing with the inclusion committee (and indeed the women’s taskforce) is that the demands may shape the public conversation. The same would apply with the Voice. </p>
<p>How the government responds to the inclusion committee in particular could affect its future relations with the Senate crossbench. Pocock is already out in the media rejecting the government’s arguments that it is constrained by a lack of resources. What about those $250 billion stage 3 tax cuts? he asks. (The government has said they won’t be touched in this budget.) </p>
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<a href="https://theconversation.com/grattan-on-friday-david-pocock-has-only-just-arrived-in-the-senate-and-now-hes-negotiating-with-the-pm-195295">Grattan on Friday: David Pocock has only just arrived in the Senate and now he's negotiating with the PM</a>
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<p>The way Pocock and other key crossbenchers react post-budget will depend on precisely what’s taken up. Pocock will be able to claim a victory if he can say his demand for the committee made a difference. </p>
<p>While the budget is a major juggling act for Chalmers, his reform of the Reserve Bank is shaping up, in political terms, as an easier task. </p>
<p>The changes in the report from the review panel, released on Thursday and accepted in principle by the government, are extensive. These include setting up an expert board that would decide monetary policy, which would be separate from the bank’s general board. The aim is to improve the decision-making of the bank, which has come under sharp criticism in the wake of its recent performance on interest rates. </p>
<p>Some of the changes will require legislation, for which Chalmers has been very anxious to get a bipartisan approach. He doesn’t want to have to haggle with the Senate crossbenchers, cutting deals and finding trade-offs, in this sensitive area. </p>
<p>So he has engaged the shadow treasurer, Angus Taylor, during the review process. Taylor has been briefed along the way and was given an advance copy of the report. </p>
<p>The strategy appears to have paid off. Taylor was positive about the review’s plan for a board of experts, and said: “It is the Coalition’s intention to continue to approach the implementation of this review with a spirit of bipartisanship.”</p>
<p>It’s a rare and welcome move away from the opposition’s usual hyper-negativity.</p><img src="https://counter.theconversation.com/content/204193/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Managing expectations before a budget is always tricky. Two committees are making this especially so for Treasurer Jim Chalmers ahead of his second budget.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/655562016-09-16T03:19:21Z2016-09-16T03:19:21ZVIDEO: Michelle Grattan on the government’s week of success<figure>
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<p>In a week marking the first anniversary of Turnbull’s prime ministership, the government was able to show it could work with the new parliament. University of Canberra deputy vice-chancellor Frances Shannon and Michelle Grattan discuss the significance of the government and Labor co-operating to pass the omnibus savings bill.</p>
<p>“What it holds for the future I think is a bit uncertain. It does give some hope of co-operation on some items. But on the other hand, Bill Shorten is going to play this parliament very toughly and so the extent of the co-operation I think is in question,” says Grattan.</p><img src="https://counter.theconversation.com/content/65556/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In a week marking the first anniversary of Malcolm Turnbull’s prime ministership, the government was able to show it could work with the new parliament.Michelle Grattan, Professorial Fellow, University of CanberraFrances Shannon, Deputy Vice-Chancellor, Research, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/655032016-09-15T12:29:48Z2016-09-15T12:29:48ZGrattan on Friday: The Turnbull government begins to wash its face<p>Finally – though who knows for how long – we see signs of the Turnbull government pulling up its socks. Or, to adapt a phrase often used by Scott Morrison, it started to “wash its face” in this second week of the new parliament.</p>
<p>The deal with Labor to secure the passage of its omnibus bill, which will now produce A$6.3 billion in savings, and the (albeit belated) announcement of a compromise superannuation package that won the support of the Coalition backbench were positive signs for a prime minister whose first anniversary received mostly bad reviews.</p>
<p>Both tone and focus were better from a government that’s been all over the place as well as ill-disciplined – although the need for a filibuster when the Senate lacked work on Monday was untidy.</p>
<p>On the other side of the ledger it seems nearly certain the legislation introduced on Wednesday for the same-sex marriage plebiscite is doomed, because Bill Shorten has flagged Labor is readying to oppose it. But even that has some upside for Malcolm Turnbull, who could do without the distraction of a campaign.</p>
<p>Despite the spotlight on the Senate crossbench, the first legislative pact of the new parliament – on the omnibus bill – was between government and Labor. They also agreed, to the anger of the Greens, to sit the Senate as late as necessary on Thursday to get the bill through before parliament rose for a three-week break.</p>
<p>The big question is whether this will be the start of further government-Labor co-operation on the key issue of budget repair. Shorten doesn’t want to give Turnbull any breaks, but Labor also has to keep burnishing its economic responsibility credentials.</p>
<p>The government needs to tot up more wins, and quite quickly – and not just on budget matters but on other issues too. The signs are its approach will be more pragmatic than pure, as we have seen on the omnibus bill and super.</p>
<p>With speculation that it will split its company tax cut to get the easier part passed – the relief for smaller enterprises – Morrison was asked on Thursday how flexible he’d be on the tax plan. “We’ll work with the parliament to maximise everything we can achieve in this parliament,” he said. “And where I can get 100% of 100%, I will go for 100% of 100%, but 100% of nothing is not the sort of pragmatic approach that I think the Australian people expect of this government.”</p>
<p>If the government is to get through its double dissolution trigger measures to restore the Australian Building and Construction Commission and toughen union governance, compromises will be needed, and those will have to be with crossbenchers rather than Labor. Employment Minister Michaelia Cash will be working on this during the parliamentary break.</p>
<p>So far the non-Green Senate crossbenchers haven’t had to do anything difficult. It’s been their peacock time, when newcomers have flaunted colourful and controversial claims and opinions in maiden speeches.</p>
<p>Derryn Hinch spoke for more than 45 minutes – the usual is 20 – and named alleged paedophiles. One Nation’s Malcolm Roberts called for an “Aus-exit” from the United Nations, with its “unelected swill”. </p>
<p>Pauline Hanson, in a twist on her original maiden speech, declared Australia was being swamped by Muslims and Muslim immigration should be stopped.</p>
<p>To stretch a concept mostly associated with issues, Hanson presents a “wicked problem” for the government. She’s a player with substantial power. She heads a Senate party of four; for the government to get measures through that are opposed by Labor and Greens, Hansonite votes will be needed. On the other hand, Turnbull abhors her offensive and divisive signature stands.</p>
<p>So the government has to deal with her on a day-to-day basis, but also distance itself from her extremism. If it robustly contests her views it amplifies her voice, and may make negotiations over legislation more difficult. If it pulls its punches, for expediency or to deny her oxygen, it fails both to defend decent values and to adequately reassure the Muslim community that she is attacking.</p>
<p>Cabinet Secretary Arthur Sinodinos told the ABC on Thursday: “We are not going to fall into the trap of beating up on her, increasing her prominence which then attracts more people potentially to her.”</p>
<p>A lot of eyes are also on Hanson’s team members. Will the loose ties holding them together come apart? Observers noted this week that already the Hansonites weren’t always voting as a bloc.</p>
<p>The next parliamentary sitting will give a better idea of how well the government is coping with this 45th parliament. In the meantime Turnbull, after his recent successful summit round, is now off to New York and Washington, where he will address the UN, attend US President Barack Obama’s summit on refugees, and meet with heads and experts from intelligence agencies.</p>
<p>On the eve of the trip, Turnbull paid an unexpectedly strong tribute to the man he overthrew a year ago this week. With Abbott sitting on the backbench, Turnbull referred in Thursday’s Question Time to “the debt” owed to him “for the leadership he showed on coming into office as prime minister in working to galvanise the strongest possible international response to the evolving threat of Daesh” and “the strength of purpose he brought to the task of restoring the integrity of our borders”.</p>
<p>The words, however, would not be a salve for the unreconciled former leader, for whom this week was the bleakest of anniversaries.</p>
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<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Finally – though who knows for how long – we see signs of the Turnbull government pulling up its socks.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/648222016-09-07T20:12:28Z2016-09-07T20:12:28ZRedressing, not exacerbating, inequality is the real moral challenge for this government<figure><img src="https://images.theconversation.com/files/136526/original/image-20160905-31623-gvdncp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The government is keen to push its omnibus savings bill through parliament.</span> <span class="attribution"><span class="source">AAP/Mick Tsikas</span></span></figcaption></figure><p>A purported priority for this 45th parliament is to tackle the deficit, last encountered in the budget items just before the federal election campaign. </p>
<p>Would it be affected by the close result and odd voting patterns? No, the government claims – its win was the mandate it sought.</p>
<p>Prime Minister Malcolm Turnbull claimed that the passing of the budget repair bills was more than just political gain. He doubled down on his economic message ahead of parliament’s return, describing budget repair as a <a href="http://www.abc.net.au/news/2016-08-29/malcolm-turnbull-pushes-labor-to-support-budget-savings/7796390%5D(http://www.abc.net.au/news/2016-08-29/malcolm-turnbull-pushes-labor-to-support-budget-savings/7796390">“fundamental moral challenge”</a>. He demanded the opposition support the <a href="http://sjm.ministers.treasury.gov.au/media-release/074-2016/">omnibus bill</a> in its entirety, as Labor “assumed passage of it in its election costings document”.</p>
<p>This sets an odd tone for a “moral” claim, as the target of most of the bill’s proposed 24 cuts are the poor and vulnerable. This is in stark contrast to another bill for <a href="http://www.news.com.au/finance/economy/federal-budget/the-big-problem-with-the-80k-tax-cut/news-story/107528e698dc528a6fb29e464c84cb73">tax cuts for those earning A$80,000 plus</a>.</p>
<p>These claimed priority items make it clear the government’s budget “repairs” will increase overall income inequities, and if supported by Labor, could further exacerbate the distrust of the “elites”. </p>
<p>The priorities in Turnbull’s speech seemed to focus on punishing the least powerful by cutting their payments. While picking on welfare recipients has been around for a long time, its current use is dicey, given that <a href="http://vtr.aec.gov.au/HouseStateFirstPrefsByParty-20499-NAT.htm">24% of formal voters indicate</a> increasing distrust of major parties.</p>
<p>Both here and overseas, there are disturbing signs of the damage of inequalities. The rising proportion of outlier candidates in the recent election match worldwide evidence that populism is rising in response to the increased inequities in the developed world – for example, the rise of Donald Trump. </p>
<p>The Brexit polls and data produced by the IMF suggest that the focus on market models may damage both <a href="http://www.independent.co.uk/news/uk/politics/neoliberalism-is-increasing-inequality-and-stunting-economic-growth-the-imf-says-a7052416.html">economic growth and democratic legitimacy</a>. And the current ABC Boyer Lectures, delivered by Michael Marmot, question whether inequalities undermine <a href="http://www.abc.net.au/radionational/programs/breakfast/boyer-lectures-michael-marmot-social-determinants-ill-health/7636982">health and national well-being outcomes</a>. </p>
<p>These all suggest that any government that fails to tackle emerging political and economic inequities may create more problems.</p>
<h2>Who will be affected?</h2>
<p>Buried in the governor-general’s <a href="http://australianpolitics.com/2016/08/30/cosgrove-speech-opening-45th-parliament.html">speech opening this parliament</a> is a brief mention of the cashless welfare card. </p>
<p>This is a further sign again of increased contempt for those who are not in paid work – and that is not just the unemployed. <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/mf/6224.0.55.001">New data from the ABS</a> family work status survey show there were around 329,200 “jobless” families with dependants in June 2015. In those families, there were 662,100 dependants aged less than 25 years, 85% of whom were children under 15. </p>
<p>In recent years, the proportion of jobless families with dependants has remained stable at around 11%. These cover carers, people with disabilities, the sick, students and parents with young or multiple children.</p>
<p>The omnibus bill – to which the government attached its hyperbolic demand for not leaving debts to our grandchildren – includes 24 items. Most of these, in <a href="http://www.smh.com.au/comment/24-shades-of-nasty-the-devil-in-the-detail-of-treasurer-scott-morrisons-6-billion-omnibus-savings-bill-20160901-gr6ddm.html">a neat summary article</a>, are described by Jessica Irvine as “24 shades of nasty”. Some are particularly toxic.</p>
<p>I have further summarised 13 of the meaner items below, with their proposed savings, which would add only just over half of the $6 billion or so expected to be saved over the four-year forward estimates. This is hardly serious deficit-cutting, but will cause real pain to those who rely on them.</p>
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<li><p>cuts in support for students and earlier FEE-HELP repayment ($3.3 million);</p></li>
<li><p>abolish bonus for those getting off Newstart and holding a job for 12 months ($242.1 million);</p></li>
<li><p>no overlap period for those moving from Newstart to paid work ($61.5 million);</p></li>
<li><p>cuts to dental services ($52.4 million);</p></li>
<li><p>two-year wait for immigrants to claim welfare payments ($312.5 million);</p></li>
<li><p>cuts to paid parental leave ($133.7 million);</p></li>
<li><p>cuts to fringe benefits valuing for other payments ($132.1 million);</p></li>
<li><p>no backdating of Carers Allowance ($108.6 million);</p></li>
<li><p>cuts to family payments and other parental leave ($330.9 million);</p></li>
<li><p>cuts to income support for mentally ill people confined by serious criminal offence ($37.8 million);</p></li>
<li><p>cuts to energy supplement for recipients of disability support pension, carer and Newstart payments ($1.29 billion);</p></li>
<li><p>tighter subsidies for high-need aged-care residents ($80.5 million); and</p></li>
<li><p>tougher repayments of debts of welfare recipients ($157.8 million).</p></li>
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<p>Apart from the Newstart savings, the forward estimates are not impressive. And the situation of those on Newstart is already grim, without further cuts. </p>
<p><a href="http://www.smh.com.au/business/workplace-relations/caught-in-an-unemployment-netherworld-too-young-to-retire-too-old-to-get-a-job-20160823-gqyv2w.html">An article in the SMH</a> on research from the Brotherhood of St Laurence has found that 40% of recipients of employment services last year were mature-age Australians who spent more than a year on income support. </p>
<p>It pointed out that more than one-third of Newstart payments go to people who are not even expected to look for work as they are sick, caring for others, in training, or cannot look for work.</p>
<p><a href="http://www.smh.com.au/federal-politics/political-news/malcolm-turnbulls-dole-cuts-will-hit-older-australians-the-hardest-20160903-gr817b.html">Another article</a> shows increasing numbers of older people on Newstart (10,000 extra since 2012, with more than half staying on the payment for at least two years). All these data suggest that what was once seen as a short-term payment has now become long term for those who meet prejudice and lack opportunities in finding paid work.</p>
<h2>Ignoring the fairness question at their peril</h2>
<p>So why is the government making these cuts their “moral” demand for support? And why has Labor not offered clear opposition? </p>
<p>Despite the clear public and political responses to the basic unfairness of these and similar cuts in the 2014 budget, the government is pressing ahead with these measures by way of its wafer-thin majority. Have neither of the major parties has learned anything from the election? </p>
<p>Both major parties would be wise to listen to the messages coming from a grumpy electorate that has indicated it wants serious leadership, not just political game-playing and increased unfairness.</p>
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<p><em>Eva Cox will be online for an Author Q&A between 11am and noon AEST on Friday, 9 September, 2016. Post any questions you have in the comments below.</em></p><img src="https://counter.theconversation.com/content/64822/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eva Cox does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>We need to ask on what basis the government is making its budget savings a ‘moral’ issue, and how the opposition can possibly support it.Eva Cox, Professorial Fellow, Jumbunna IHL, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.