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Budget for a post trickle down theory world

  • 18 April 2016


The dissonance between what politicians think matters to people and what actually matters to people has never been greater. Two weeks out from the 2016 federal budget, we face the prospect of a double-dissolution election over nothing more than anti-union regulation.

The federal parliament is being recalled next week, in order to consider legislation to restore the Australian Building and Construction Commission and establish a Registered Organisations Commission.

These bills, according to Prime Minister Malcolm Turnbull, are central to the Coalition economic agenda.

But the productivity case for these bills has been widely disputed, not least by the Productivity Commission. This isn't economics; it is politics, and a disservice to Australians. The refusal to also form a royal commission into the banking and financial industries, which would inject more transparency than ASIC investigations, does nothing to change that impression.

The Coalition government, in other words, has been remarkably tone-deaf to the zeitgeist, possibly at its own peril.

In recent years, public expectation about whose side governments are supposed to be on has been emphatic: the 2011 Occupy movement (which had coined the 99/1 per cent language adopted by Bernie Sanders); the subsequent resonance of Thomas Piketty's treatise on inequality; the rise of anti-austerity figures in the UK and Europe; the political disenchantment that has turned toxic in the United States.

We live in a post trickle-down theory world, where people are sensitised to government-enabled corporate excess and have legitimate reasons to doubt whether elected officials are capable and willing to serve their interests. The lesson from the 2014 federal budget is that there are non-negotiables around the function of government: to provide the conditions that ensure the flourishing of all citizens.

Yet in terms of future-proofing living standards, the Coalition has so far presided over an ideas bust rather than boom, unless boom is the sound of something spontaneously combusting. The GST increase has been dumped, and income tax devolution to the states has been rejected by premiers and chief ministers (which by necessity spiked the notion of federal withdrawal from public schools funding).


"The credibility test for political parties — and the central question around fiscal policy — is no longer about economic growth, but growth for whom."  

The prime minister has also indicated that the coming budget will focus on promoting investment, innovation and enterprise. He invokes prudence, even as Treasurer Scott Morrison floats company tax cuts — which must be offset either by tax increases or