Kate Chaney (Curtin, Independent) Share this | Hansard source

My summary takeaway on the budget is that it's good to see a surplus this year but I'm concerned about the looming deficits and their possible impact on inflation. We do need to do more about long-term issues like tax reform and productivity. The budget does contain some long-term thinking in the Future Made in Australia package, which is being introduced this week, but the devil will be in how it's implemented. I want to say a bit about cost-of-living relief; a long-term perspective on the budget, including tax reform productivity and climate; and how the budget is addressing a range of specific issues raised by my constituents.

On cost of living, there is no doubt that this budget comes at a difficult time. Every time I'm out in my electorate, I hear about the cost-of-living challenges people are facing. Managing inflation is the best way to reduce cost-of-living pressures, and the government's fiscal policy is one of many levers that affect inflation—but it's one that the government can actually control. In this budget, the government has tried to walk the fine line of providing cost-of-living relief without injecting more money into the economy and making inflation worse. Is it working? Recent inflation figures do create some additional concerns, but we won't really get a clear picture until we see the June quarter, and we won't see the full impact of the stage 3 tax cuts until the next quarter. Based on consumer confidence, which is a bit lower, it may be that people will slow their spending and the stage 3 tax cuts reshape may not have an additional upward pressure on inflation. It remains to be seen.

The $300 energy rebate may technically reduce the measure of inflation, but it does seem like a blunt instrument, given that it's not means tested. We've seen no increase in the base rate of JobSeeker. We have seen a small increase in Commonwealth rent assistance and some tweaks to JobSeeker for people with reduced capacity to work.

This budget includes the previously announced changes to stage 3 tax cuts which came into effect this week, HECS indexation and paid placement for students, and a freeze on medicine copayments for everyone with a Medicare card. For many in my electorate, these measures will be welcome. Time will tell what impact this will have on inflation, and the government will no doubt bear responsibility for whatever happens to interest rates, despite the independence of the RBA and the other factors at play.

The biggest cost-of-living issue raised with me in my electorate, and reiterated by a recent survey in my electorate, is housing. The budget contains new housing investment of $6.2 billion and a further $1 billion to help states and territories with infrastructure, as well as a 10 per cent increase in Commonwealth rent assistance and additional concessional loans for community housing providers and other charities to support the delivery of new homes. I often hear that people can't find a builder. This budget promises 20,000 additional fee-free TAFE places for construction-related courses and $1.8 million to streamline skills assessment for about 1,900 migrants from comparable countries who want to work in Australia's housing construction industry. Will this be enough on housing? Probably not, but I hope it helps. The reality is that it has taken us 20 years to get into our current crisis situation on housing, and it's unlikely to be fixed in one budget. Housing will be a significant election issue, and it would be good to see longer-term policy approaches from both sides that are bolder than setting aspirational targets and throwing more fuel on the fire by adding superannuation to be spending pool. We need a clear vision on how affordable housing should actually be, and then our policies can be pulling in the same direction to get there.

Taking a long-term view, I see one plus and two minuses in the budget. The Future Made in Australia package can be a kickstart to encourage investment and modernised net zero economy. What I like about this is it addresses climate in a proactive way, recognising that the world is changing and we want to be part of that change the world. Too often, the conversation about climate is about what we have to lose, how much it will cost to adapt and how terrible everything is. While we need this as context to actually drive the change, this budget shows that the conversation has matured. We're looking at the incredible opportunities available for Australia—and, in particular, Western Australia—if we can actually get this transition right. We currently rank between Namibia and Uganda on economic complexity, with our largely dig-and-ship economy. We need to invest in adding value to our resources, which would make us more resilient while building on the comparative advantages we have.

This Future Made in Australia package sounds promising, and is a response to calls from me and others for an Australian answer to the US Inflation Reduction Act. Its success will depend on how it is implemented, how investment decisions are made, how quickly, and whether it supports the right industries that can ultimately stand on their own feet. Funding production tax incentives for critical minerals is good for Western Australia as we try to encourage investment to add value and green energy to our abundance of mineral deposits. I have advocated for this approach. This way, we are spending taxpayer funds only if something is actually produced in strategically targeted areas where a leg-up is needed in the transition phase. We've heard about some investments already, and, to be frank, it's very hard to assess whether these are good investments based on the minimal information provided. Going forward, I'll be advocating for transparency on how investment decisions are made under the Future Made in Australia package—both those already made and those still to come—so that taxpayer money is being used to set us up for future success, not to fund pet projects.

One of the things missing in this budget is significant tax reform. We have the stage 3 tax cuts, which are much-needed cost-of-living relief, but they're not real tax reform. We need to ensure that we're not spending we don't have in the budget. This year's surplus masks an underlying structural deficit, and is expected to be followed by two deficit budgets. Gross debt will peak at 33.9 per cent of GDP by the middle of next year. This is a real concern and raises the issue of intergenerational equity. Over the long term, we want to be able to afford services like child care, aged care and the NDIS, but we still rely too heavily on taxing effort via income with our ageing population. Income tax makes up half of all of our tax, which is one of the highest proportions in the world. We have an increasing burden on a declining proportion of the population. People across the whole political spectrum are calling for tax reform: simplification and rebalancing between personal tax, corporate tax and consumption tax; economic rents from natural resources; and taxes to address social, environmental or economic costs. We need to think about the balance between old and young Australians and make good on the intergenerational bargain to support people at the vulnerable beginning and end of life in exchange for the promise that things will keep getting better.

I recognise that significant reform is politically hard. The political focus on winning elections and short-term handouts wins more votes than long-term structural changes. One of our key long-term problems is that we are no longer a high-growth or high-productivity country. Economic growth enables us to provide the services the community expects and demands. Forecast growth is softening considerably both globally and in Australia, where the growth forecasts have now been downgraded. Growth is driven by productivity, creating more value from less. This budget does not seem to have significant productivity reforms. I would have liked to see red tape reduction or IR simplification to make it easier to do business in Australia. Our industrial relations system is one of the most complex in the world, and we should be able to protect workers' rights without the endless complexity we've created. Addressing productivity will require thinking about how to make it easier to employ people, not harder.

The biggest long-term challenge we face is obviously climate change. While there are some positives in this budget on climate, including the funding of the Net Zero Economy Authority, Powering the Regions and Future Made in Australia, there are some big gaps. We're still sending mixed messages about our commitment to decarbonise, with the recent commitment to expand and extend the gas industry well into the second half of the century. We're also continuing to pay fossil fuel subsidies and take an embarrassingly low tax revenue from fossil fuel companies. There's funding allocated for the regulation of carbon capture and storage. Now, CCS is a necessary development given that every future energy plan contains some gas, but it's not been very successful in the past, and I don't think taxpayers should be funding it. Let the companies that rely on it for their expansion prove that it works.

There are a range of constituent issues that have been raised that are addressed in this budget, including students—it's good to see the change to HELP and HECS—aged care and child care. It's good to see additional home-care packages, some NDIS reform and additional resources for Services Australia. We've seen some additional allocation for mental health services, which is important too. On balance, this budget has something in it for a lot of Australians. But, other than the outline of the Future Made in Australia package, there's little of the long-term reform we will need to see if we want to be a prosperous and fair country in a generation's time.

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