Author: Gavan Ord, Business Policy Adviser, CPA Australia.
The federal budget is coming to your screen on Tuesday evening. This is the second budget for the 2022 calendar year but no, you haven’t seen this show already. This is the first episode of a brand new two-part series for the new Anthony Albanese-led Labor government.
Here are five spoilers we’re expecting to see on the night.
1. A new vision
When Albanese and Treasurer Jim Chalmers appear on your screens this week they’ll not only be presenting the federal budget but also the latest mid-year economic and fiscal outlook.
The outlook will reveal major global and domestic economic headwinds so the budget will focus on these difficulties. We think the federal government will respond with a long-term strategy to handle these challenges but little in the way of major new spending.
Chalmers has previously spoken about a “two-budget” approach to funding government promises and finding savings. This is his opportunity to set the stage for bigger ambitions ahead of the second budget, which is likely to be in May.
2. Wellbeing and the environment
This will be our first glimpse of a “Wellbeing Budget” — an election promise made by the government to analyse a range of wellbeing factors when making decisions.
We’re hoping the environment will feature prominently. Climate change is a major contributor to wellbeing and economic outcomes. So we want this budget to consider the impacts of the environment and health on the public, alongside traditional economic indicators.
CPA Australia has been calling for the government to include a Climate Change Budget Statement that embeds climate analysis into every part of decision-making. We hope this is a major plot line this year.
Support for the recent floods may also make a last-minute appearance given recent events.
3. Cost of living
Inflation is soaring, interest rates are climbing and households and businesses are feeling the pinch. The federal government will have to acknowledge and act on the pain the public is experiencing right now.
It’s not yet clear exactly how they will relieve this pressure but they will have to look at measures that do not directly contribute to inflation. In layman’s terms, don’t expect big cash hand-outs to be a feature when the curtains rise on Tuesday.
For businesses, we would prefer carefully chosen, targeted measures aimed at growing the economy and productivity. This could include vouchers for businesses to access professional advice and support for employers to adopt new technology and improve their cybersecurity.
4. Jobs and skills
There is still a major skills shortage in Australia. Businesses are finding it hard to employ the right people with the skills they need. If we want solid economic growth to feature in future years, we need to look at ways to fix this problem now.
We expect to see a focus on jobs and skills in this budget following a summit on the issue in September. A white paper will be released in mid-2023 but the federal government shouldn’t sit on its hands in the meantime when there are quick wins that can be achieved. For instance, we don’t just need a Ruby the Roo or a “throw another shrimp on the barbie” advertising campaign to lure tourists to our shores. We could consider launching a major advertising campaign overseas specifically to attract international students.
We then want the government to focus on skills rather than job titles when determining who makes the priority list for migration into Australia. The workforce of the future will not be determined by occupations but by the specific skills required to get the work done properly.
5. The unknown
There are always unknowns ahead of the Budget, so expect one or two surprises. CPA Australia will be in the budget lock-up on the day, ready to analyse the budget papers. Our budget analysis will be available to the public on our website.
But remember this isn’t a budget finale. It’s the debut. We’ll be left with a few teasers and maybe even a cliffhanger for the next instalment of the budget in May.
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