Budgets are to stakeholders and interest groups as Christmas is to children. They are preceded by a multitude of letters to “Santa”, or the treasurer, in the run-up.
Two key correspondents were appointed by the government itself for the budget of 9 May. This week, the wish lists of the Economic Inclusion Advisory Committee and the Women’s Economic Equality Taskforce were released.
The Inclusion Commission, an ongoing body to assess social support adequacy, was born last year out of a request to Prime Minister Anthony Albanese from Senator David Pocock, in return for his vote on the government’s labor relations legislation.
It was always clear that the commission would confront the government with more demands than it could meet, and that would be a political challenge.
The task force, chaired by businesswoman and gender equality advocate Sam Mostyn, was created to reflect the government’s desire to underline its policies towards women.
Managing expectations before a budget is always tricky, and these committees are making this especially for Treasurer Jim Chalmers ahead of his second budget.
Chalmers’ message is that resources are limited and the government cannot do everything it would like to do (much less everything others would like).
Indeed, Chalmers is trying to find ways to limit spending – to allow maximum room for fiscal recovery – rather than expand it.
National Disability Insurance Secretary Bill Shorten this week outlined areas for reform of the NDIS to get it back “on track.” While Shorten emphasizes that it’s about improving outcomes, everyone in the government knows that the cost of the NDIS must be contained or the scheme will become totally unsustainable.
In terms of Treasury numbers, the withdrawal report’s recommendations would cost more than $34 billion over future estimates.
The government has indicated that it expects some of the proposals. But it’s already shied away from the biggest: a big increase in JobSeeker, which the report says should be cut to about 90% of old age pensions (at a cost of $24 billion over future estimates).
Read more: Boosting JobSeeker is the most effective way to tackle poverty: what the treasurer’s committee told him
That would restore the relativity of the mid-1990s. At the moment, the rate for single persons is about 65% of the old-age pension.
The “urgent” list of the women’s task force includes reinstatement of parental benefit (single person) for women with children over the age of eight, abolition of the activity test childcare allowance and investments in “an interim wage increase for all young children”. educators”.
Despite the government ruling out JobSeeker’s “major” increase, it’s still possible that the budget will make some changes to it, according to the inclusion report, among others.
Similarly, the government could take on the restoration of parental benefit (single person), which is under great pressure.
The inclusion committee is chaired by former Secretary of Labor Jenny Macklin, who has an extensive background in welfare policy and has substantial expertise among her members. The report contains an abundance of detail and it is closely argued.
The lens of the report is completely focused on issues such as adequacy and poverty. While it says the JobSeeker recommendation would not be a significant disincentive to seek paid employment (and the current low rate is a disincentive to do so), some believe the recommended big raise would indeed create a disincentive in our current job market with full employment.
Many people, especially in the Labor grassroots, will see this report as a benchmark of what a Labor government should be doing to promote justice for the people at the bottom and create a more just society. The same applies to the measures taken by the women’s task force.
In this sense, the budget must inevitably fall short of the tests these reports place on it.
Read more: Grattan on Friday: Chalmers grapples with a budget where economics and politics are going in different directions
Commentators have already suggested some kind of parallel between the proposed Indigenous vote to parliament and the inclusion committee. The comparison is very long, but it always concerns special access, but the government is not bound by recommendations.
What we see with the inclusion committee (and indeed with the women’s task force) is that the demands can shape the public conversation. The same would apply to the voice.
In particular, how the administration responds to the inclusion committee may affect its future relations with the Senate Bench. Pocock has already appeared in the media and rejects the government’s arguments that it is constrained by a lack of resources. What about those $250 billion phase 3 tax cuts? he asks. (The government has said they will not be touched in this budget.)
Read more: Grattan on Friday: David Pocock has only just arrived in the Senate and is now negotiating with the Prime Minister
How Pocock and other key post-budget cross-benchers respond will depend on what exactly gets picked up. Pocock will be able to claim a win if he can say his demand made a difference to the committee.
While the budget is one big juggling act for Chalmers, his reform of the Reserve Bank seems, in political terms, to be an easier task.
The changes to the review panel report, released Thursday and accepted in principle by the government, are sweeping. These included setting up a board of experts that would set monetary policy, which would be separate from the bank’s general council. The goal is to improve the bank’s decision-making, which has come under sharp criticism in the wake of its recent performance on interest rates.
Some changes require legislation, for which Chalmers was keen to take a two-pronged approach. He doesn’t want to have to haggle with the Senate crossbenchers, make deals and trade-offs in this sensitive area.
That’s why he brought in the shadow treasurer, Angus Taylor, during the review process. Taylor was briefed en route and pre-given a copy of the report.
The strategy appears to be paying off. Taylor welcomed the plan of the review before a board of experts, saying: “It is the intention of the coalition to continue to approach the implementation of this review with a spirit of bipartisanship.”
It’s a rare and welcome step away from the opposition’s usual hyper-negativity.
