On Tuesday evening, Treasurer Scott Morrison will deliver the first Budget of the narrowly re-elected Turnbull Coalition government.
Part of the cost of the double dissolution election last July has been the creation of a Senate with the largest, most diverse group of crossbenchers ever to sit on the red benches. This will make the passage of any new Budget contested measures difficult, particularly given the Prime Minister's vulnerability on his right flank, and the Labor Party's propensity to mimic the Opposition tactics adopted previously by Tony Abbott.
The government needs to create a clear narrative as to how it will achieve equitable and sustainable growth through this Budget. Writing in The Monthly on 'The rise and stall of Malcolm Turnbull', Laura Tingle observes: 'While budgets don't have the punching power they once had to change the political narrative, this year's looms as a crucial opportunity for the prime minister and his government to make people take a second look at them.'
The federal Budget is not merely an economic statement. It is a social compact. It declares the government's priorities and displays its vision for Australia. Or at least, it should.
We have never taxed as highly as the Scandinavians. Neither have we provided the same comprehensive suite of social services and hole-proof social welfare net as them. Nor have we taxed as lowly as the Americans. We have never relied so heavily as have the Americans on private philanthropy to meet the needs of the homeless on the streets.
The strain on our health, education and social services is now showing. But there is no appetite in the major political parties for increased taxation. So, increased services in one sector need to be matched by savings in another. Submarines don't come free.
Part of this government's vision includes 'budget repair', 'jobs and growth' accompanied by corporate tax cuts, more affordable housing, a 'priority investment approach' to welfare reform, and a new model for education funding: 'Gonski 2.0'.
However, the vision has been clouded by failures in community consultation, mixed messages in the 24/7 media cycle, and the complexity of compromises which need to be cut with Senate crossbenchers holding a variety of philosophies and agendas.
"Those issues will be seen to be properly weighted only after real consultation with all players. Government cannot just deliver the right answer with a media statement."
The latest instance is last week's announcement of the school funding changes. No matter what the merits of the changes, it was ill-advised to announce a new ten-year funding plan without any consultation with the administrators of the Catholic education system, the second largest system in the country, educating 20 per cent of the school age population.
Any government wanting to fund a first-rate education system needs to consider issues of equity, sustainability, choice and independence. Those issues will be seen to be properly weighted only after real consultation with all players. Government cannot just deliver the right answer with a media statement.
Government has a legitimate interest in reducing reliance on welfare assistance and in streamlining the provision of welfare services. But it must be done through respectful consultation with welfare providers and welfare recipients. Reform is not assisted by demonising recipients or sidelining long term providers. Government has every right to insist that recipients do what they can to get a job and to pursue training. But government has a duty to ensure the means to enable people to live with dignity when through no fault of their own they cannot find a job or undertake training.
Government has every right to insist that welfare providers be as efficient as possible, adapting to the modern approaches to welfare reform, including client-based funding and the priority investment approach. But government has the duty to continue block funding for the provision of services for the benefit of those citizens who cannot avail themselves of the new reforms. Think only of people with disabilities in remote parts of Australia trying to access services through the National Disability Insurance Scheme. It just can't be done without block funding being maintained for providers out back. The National Party should understand that.
Since the Global Financial Crisis, Australian governments of both persuasions have argued for and implemented policies to reduce our national debt and to return the Budget to surplus. Every Budget for the last decade has produced a deficit, with governments of both political persuasions espousing the desirability of a return to surplus. Since 2014 both the Abbott and Turnbull governments have implemented a raft of measures which have saved billions of dollars from important areas of social services as well as welfare and family payments. These measures have unfairly placed the burden of 'budget repair' on those least able to cope.
"It's difficult to demonstrate our national commitment to mutual respect, equality and the fair go when we have so many families and children still living below the poverty line."
The government has promoted a divide between the 'lifters and leaners', between those who deserve and don't deserve our support. The poor and vulnerable are not the cause of our current economic circumstances; they are the main victims.
The Budget provides an annual opportunity to enact policy priorities by collecting and distributing public funds in a way that reflects the values of Australian society. Prime Minister Turnbull and his Minister for Immigration and Border Protection Peter Dutton have been making much of Australian values of late, insisting that newcomers embrace these values and be adequately tested before accessing citizenship. Announcing the government's measures for 'Strengthening the Integrity of Australian Citizenship,' Turnbull said, 'Australians have an enormous reservoir of good sense, and we know that our values of mutual respect, equality of men and women, democracy, freedom, rule of law, those values, a fair go, they are fundamental Australian values.'
It's difficult to demonstrate our national commitment to mutual respect, equality and the fair go when we have so many families and children still living below the poverty line, when we have 105,000 Australians homeless on Budget night, when we have 250,000 Australians per annum seeking the services of homelessness agencies, when we have 200,000 families on the waiting list for affordable housing, and when so many of our young people are locked out of the job market, while having to survive on the inadequate NewStart allowance of $535.60 per fortnight.
This year's Budget is an opportunity for government to commit itself to mutual respect, equality and a fair go for the present generation of 'haves' and 'have nots', and for future generations whose financial burdens will be eased should the deficit be reduced and should growth be sustained. The balance is not readily found when the Prime Minister's leadership is fragile in his own party room, when the spirit of cooperation between government and opposition is lacking, and when the Senate cross bench is so fractious. Here's hoping.
Frank Brennan SJ is CEO of Catholic Social Services Australia. This is an extract from his John Wallis Memorial Lecture delivered in Toowoomba on 7 May 2017. Read in full | Listen