Criticism of the government’s failure to address the root cause of issues facing Australians in favour of political expedience following the recent federal budget decisions have left voters anxious to see results
The headline-grabbing features of the budget included a 6-month halving of the fuel excise that will shave 20c off petrol prices and a $250 one-off payment for millions of Australians. Both measures are designed to ease the pain being felt by many due to the rising cost of living.
Political economist and author Dr Elizabeth Humphrys believes these short-term measures are one of several announcements in the budget that will do little to help people beyond the weeks leading up to the election. She says that cost of living prices will continue to hurt low-income Australians until governments lift the minimum wage and social benefits such as the pension.
During the 2019 election, Scott Morrison criticised then-Opposition Leader Bill Shorten’s proposal to raise the minimum wage, saying it would force businesses to lay off staff. However, recent developments in economic theory have challenged this orthodoxy, with one US study indicating higher minimum wages do not generally hurt employment and lead to higher labour force participation and productivity.
Then there’s the issue of social benefits, which Dr Humphrys says are too low, as evidenced during the pandemic.
The government could easily target people on benefits and people on the minimum wage to help with the cost of living. Yet politically, they don’t want to be seen to be backing welfare recipients or handouts.
“We know that unemployment benefits and other pensions are well below what we consider the poverty line. Job Seeker and Job Keeper increasing in the pandemic, lifted a whole series of people temporarily out of poverty. The decision to go back to the so called normal rates … sent those people back into poverty.”
Given the strong economic argument for lifting wages and benefits, Dr Humphrys believes the government’s refusal to do so can only be seen as politically motivated.
“The government could easily target people on benefits and people on the minimum wage to help with the cost of living. Yet politically, they don’t want to be seen to be backing welfare recipients or handouts.”
Another issue which was largely ignored in the budget was climate change. Climate spending is forecast to represent just 0.3 per cent of total budget expenditure for the next three years. The environmental policy that drew most attention was the $1 billion allocated to protecting the Great Barrier Reef, mainly through improving the reef’s water quality. The condition of the Great Barrier Reef has been under increased scrutiny since after UNESCO made a recommendation to list it as “in danger” in June, 2021.
Dr Humphrys believes this is another example of the government ignoring the root cause of a crisis, in favour of positive optics heading into an election.
[It’s] what’s best for the nation and not what’s best to get the Liberal party re-elected.
“I think even Liberal voters want action on environmental issues, [so] they can’t afford to not mention it,” Dr Humphrys said,
“But they don’t want to seriously address the problem with government money. And to suggest some small amount of money directly spent on the reef is going to reverse the damage rather than tackling the root causes of climate change [is incorrect].”
Josh Frydenberg’s 2019 pre-election budget is now seen by many as playing a pivotal role in orchestrating Scott Morrison’s “miracle” election victory. Regardless of whether he repeats the trick in 2022, long-term issues of inflation and the climate crisis are unlikely to go away.
At a time where rising petrol prices and historic flooding events are bringing these issues into the spotlight, it remains to be seen if voters will regard the budget, as the ABC’s Leigh Sales put to Josh Frydenberg on Tuesday night, as used to deliver “what’s best for the nation and not what’s best to get the Liberal party re-elected”.
Feature image sourced from: Aditya Joshi