2020 budget: politicians, industry leaders and think tanks react to government’s plan

By Shannon Jenkins

Wednesday October 7, 2020

Projects that build human capital are near to the most valuable investment a government can make.(AAP Image/Mick Tsikas)

While Tuesday evening’s federal budget has been met with praise in a range of areas, from tax cuts to mental health support and measures to assist businesses, there has, as always, been much criticism regarding the communities, industries and issues that have missed out.

Here are some of the reactions to the 2020-21 budget, from the politicians, think tanks, non-government organisations, and more.

The politicians

Appearing on Sunrise, Labor leader Anthony Albanese said some of the positive outcomes of the budget included additional funding for mental health support and local government, but “an overall comprehensive jobs plan that just isn’t there”.

“If you’re over the age of 35 you’re going to lose your wage subsidy in March. If you then go onto employment benefits you’ll be back to $40 a day … and you’ll be competing for a job with someone under 35 who is being subsidised for work,” he said.

He said there was also no support for women, who have been “particularly adversely affected by the pandemic”, and the mention of women in the budget was simply an afterthought.

Focusing on environment and energy measures, Independent Zali Steggall said the government should have followed the example of Germany, which dedicated €40 billion — a third of its stimulus — to clean energy technology initiatives. It also could have looked to Canada, or to organisations such as the Climate Council, she said.

“$1.4 billion over 12 years for the Australian Renewable Energy Agency is one-tenth of what we need to transition our economy to net zero by 2050. Countries like Canada have allocated $10 billion for their own clean energy infrastructure. As a potential renewable energy super-power, we should do the same,” she said.

Steggall noted that while $67 million for oceans and $250 million for recycling was welcome, conservation programs needed more funding. She also pointed to other areas where spending could have been redirected.

“Somehow, an upgrade to Liberal Party donor Trevor St. Baker’s Vales Point Coal Plant snuck into this budget. This is public investment that should be spent on electric vehicles or battery manufacturing,” she said.

“The government is directing $250 million to oil refineries. These refineries produce fuel of the lowest quality in the OECD. This money should be spent on electric vehicles by providing tax breaks for purchases.

“There has also been no extra funding dedicated in this budget to an independent regulator which reviewer Graeme Samuel said is integral to reforms to the EPBC Act.”

ACT Chief Minister Andrew Barr focused on the impacts to the Australian Public Service, noting that staffing levels would return to 2006-07 levels.

“Not a particularly promising outlook for employment in the Australian Public Service beyond 2020-2021,” he wrote.

He was also not pleased about the amount of money directed towards the ACT in general, stating “a number of missed opportunities for the ACT in the commonwealth budget will leave many Canberrans nervous about their job prospects”.

Greens leader Adam Bandt also took to Twitter to slam many aspects of the budget.

“JobMaker is a recipe for temporary, casual, low wage exploitative work. Big corporations like McDonalds will be rubbing their hands together. Instead, we need a job guarantee for young people, with decent wages and secure work,” he wrote.

“If the government was serious about protecting people’s mental health, they wouldn’t be throwing them into poverty. JobSeeker and JobKeeper must be restored.”

On the manufacturing plan, he noted the government is “giving five times more to tax cuts than they are to restart our manufacturing industry”, and called out Josh Frydenberg for committing to “open five mega gas zones across Australia” immediately after mentioning climate change.

Bandt also criticised the military funding.

“Public schools are underfunded, universities get slashed and people are living in poverty, but there’s always money for new missiles,” he wrote.

Over in New South Wales, state treasurer Dominic Perrottet said the measures announced in the budget would “create thousands of new jobs, deliver vital infrastructure projects for the people of NSW, and help stimulate the economic recovery through government spending and tax cuts”.

“Businesses doing it tough have been thrown a lifeline with the ability for them to write-off the full value of eligible assets, and offset losses incurred out to June 2022, providing support when it is needed most,” he said.

Federal shadow treasurer Jim Chalmers and shadow public service minister Katy Gallagher weren’t so optimistic. They said the budget has left too many Australians behind, noting the jobless rate would not return to pre-crisis levels even after four years.

“Despite producing a grab-bag of headline-seeking announcements, the government expects another 160,000 Australians to be added to the jobless queues by Christmas … That’s one trillion dollars of debt but millions of Australians left behind, including 928,000 people aged over 35 on unemployment benefits deliberately excluding from hiring subsidies,” they said in a joint statement.

“There is no plan to lift the permanent rate of JobSeeker from $40 a day, tackle insecure work, create opportunities for women or to improve access to child care. No plan for social housing, cheaper and cleaner energy, or to address the crisis in aged care. No plan to kick-start the economy, boost productivity, increase participation, or lift the speed limit on growth.

“While the average worker will receive a $50 per fortnight tax cut, millions on JobKeeper have seen their payment cut by at least $300 per fortnight.”

The policy think tanks

The Australia Institute has said the $16.9 billion tax cuts announced in the budget would create at least 160,000 fewer jobs than investing the same amount into healthcare, education and other public services.

Australia Institute senior economist Matt Grudnoff argued that tax cuts are a “remarkably inefficient way to create jobs”.

“Every job created by handing money back to taxpayers comes at the cost of many times more jobs that could have been created from direct investment in services by the government. Investing in employment rich services will always deliver maximum bang for buck and create many more jobs than handing out tax cuts,” he said.

“This budget represents an extraordinary missed opportunity to both create jobs in the short term and boost Australia’s productivity by investing in health, education and the arts over the long term.”

The Australia Institute’s Richie Merzian also noted the announcements had confirmed the government’s commitment to fossil fuels “with token support for renewables on the side”, according to Guardian Australia.

“It’s disappointing to see the renewable energy agencies and the CEFC (Clean Energy Finance Corporation) not coming out with significant increases. In the case of Arena it’s a decrease,” he said.

Institute of Public Affairs research fellow Cian Hussey said that while bringing forward Stage 2 of the income tax cuts was welcome, Stage 3 tax cuts must also be brought forward to “give households a much-needed boost”.

“They should also slash the corporate tax rate to make Australia an attractive place for capital investment and cut onerous red tape which costs our economy $176 billion each and every year,” he said.

The right-wing think tank also noted that, in light of the record $1.1 trillion debt, the federal government must “pursue an agenda of rapid economic growth if there is to be any hope of eliminating debt within the next half a century”.

“Higher debts mean more money is spent on interest payments, rather than essential services like hospitals, schools, and defence. Around 60% of interest payments are sent overseas — high levels of debt leave us economically weak and unable to respond to future economic shocks,” Hussey said.

Read more: Temporary increase to public service staffing levels to drive COVID-19 recovery

The unions

The Community and Public Sector Union said that while there has been some temporary relief in the Average Staffing Level Cap for the National Disability Insurance Agency, CSIRO, Australian Bureau of Statistics and the Aged Care Quality and Safety Commission, public sector staff numbers would reach a “new historic low” by 2023-24.

“Tonight, the government failed to seize the opportunity to remove artificial staffing caps, and gives only temporary relief for the pandemic period, with a plan to cut public sector workers to all-time historic lows. Even with the slight increase of 325 extra Services Australia staff, there will be 2339 or 7% less staff in 2020-21 than when the Coalition was elected,” CPSU national secretary Melissa Donnelly said.

“For those hundreds of thousands of Australians directly affected by this crisis, the government’s failure to address public sector capacity means that you will continue to face long call queues when calling Centrelink, more unanswered calls, and longer waits for those small businesses trying to access support from the ATO.”

Donnelly said the government has also missed a job creation opportunity by failing to increase the graduate and other entry level public service jobs.

According to ABC News, National Tertiary Education Union national president Alison Barnes said the budget has provided “scant support” to the university sector, which “should be at the centre of national economic reconstruction”.

Meanwhile, Australian Council of Trade Unions president Michele O’Neil said the government has missed the opportunity to “pick up ideas like free childcare to give women the best chance to get back to work”.

The business leaders

In welcoming the budget, Canberra Business Chamber chief executive Graham Catt said the government had recognised that businesses were “critical to jobs and our economic recovery”, according to the Canberra Times.

“Initiatives such as extending the investment incentive so that businesses can more easily buy equipment, and allowing companies to offset losses against prior year profits will also help a range of local companies,” he said.

He welcomed JobMaker, the 50% wage subsidy for new apprentices and trainees, and the backdating of tax cuts.

“This will let households keep more of their own money to spend, and that money should find its way into our local economy and businesses,” he said.

Business Council of Australia chief executive Jennifer Westacott has also welcomed the business support measures in the budget. She told the ABC that phasing out JobKeeper by March was also the right move, as the best way to get people back to work “is to drive business investment, drive activity with really substantial expenditure on encouraging business investment”.

The NGOs

Mission Australia CEO James Toomey said it was “shocking” that the budget hasn’t provided the long-term investment needed to address the shortage of social homes in Australia.

“Despite a significant investment in infrastructure in this year’s federal budget to help create jobs, we are deeply disappointed the essential social infrastructure of social housing has been ignored,” he said.

While Toomey welcomed the two cash payments for aged, carer, family and disability welfare recipients, he said the measures were not enough.

“Inadequate income support is incredibly distressing for the people we serve at Mission Australia. Without enough to cover the basics, they can be forced to make difficult decisions such as going without adequate food, missing out on life saving medicine, or being unable to afford transport to a job interview,” he said.

“Additionally, many can be pushed into stressful and unsafe living conditions as it’s all they can afford. All of this, coupled with the stressors of the pandemic, can enormously impact on people’s mental health and wellbeing.

“Turning back to $40 a day from 2021 would be a disaster for so many people around Australia. It is too low, and would return too many people to poverty and drive many into homelessness at a time when we should be supporting people’s wellbeing and taking steps towards recovery.”

Mission Australia has also welcomed the wage subsidies for trainees and apprentices, but expressed concern about what will happen after 12 months when the subsidy expires.

As reported by Guardian Australia, environmental groups have been disappointed by the budget.

Australian Conservation Foundation chief executive Kelly O’Shanassy criticised the funding of fossil fuel projects when “the best way to cut the pollution driving global warming is to move away from burning coal and gas”, and said more money was needed to protect wildlife and habitats.

Meanwhile, Greenpeace Australia’s Pacific program director Kate Smolski said:

“Reading this budget, you would never know that Australia very recently suffered the worst bushfires in its history that killed more than 30 people, billions of animals and burned more than 17 million hectares of land including homes and businesses.”

Read more: The Briefing: everything in Budget 2020, what the punters thought, and how it ranks in the global use of renewables as post-COVID stimulus


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