Painting on a big canvas: Address to Institute of Public Accountants & Canberra Business Chamber 2024 Federal Budget Breakfast

I acknowledge the Ngunnawal people, the traditional owners of these lands, and pay respects to all First Nations people present. Thank you to the organisers, the Institute of Public Accountants, and the Canberra Business Chamber, for the opportunity to address you following this year’s Federal Budget. I also acknowledge my parliamentary colleagues who are here today. Apologies in advance that I cannot stay for the whole event – we have a scheduled crossbench briefing at 8.15am where I am presenting on upcoming legislation.

By my rough count, this is the seventh time I’ve addressed this breakfast – a great chance in the Great Hall to talk about whether last night’s budget meets our great expectations. It’s not just a moment to talk numbers, but also an opportunity to consider Australia’s place in the world, and whether we’re making the right calls to shape a fairer society and a stronger economy.

If you need reminding that each of us are inheritors of past traditions and custodians of the future, take a look at the tapestry at the end of the room. In designing it, Arthur Boyd wanted to refer to one of history’s great tapestries, the Bayeux Tapestry that shows the events leading up to the 1066 Norman Conquest. Halley’s Comet is in that 1066 tapestry. In 1986, when the tapestry was being made, Halley’s Comet was in the sky again. So the weavers suggested that Boyd include it, as a way of acknowledging the history of those weavers from nearly a millennium ago.

Budgets take their place in the long arc of history, and also in the big geostrategic context. This year’s budget is crafted in the context of an ongoing war in Ukraine, and conflict in the Middle East. As the Treasurer noted in a recent speech to the Lowy Institute, ‘there is some welcome resilience in the global economy, but we still face a perilous outlook, fraught and fragile’.

The International Monetary Fund’s projections have global growth continuing to fall over the remainder of this decade. In advanced economies, inflation lingers. In the long-term, China won’t be the engine of regional growth it has been. Over the coming decades, the Chinese economy will likely slow as the population ages and the number of working age people falls.

The net zero transition requires massive global investment in renewables, in energy efficiency, and in cleaner technologies such as electric vehicles.

Impediments to trade have proliferated, creating a particular challenge for a medium-sized open economy such as Australia.

Looking globally is also a reminder of Australia’s strong economic conditions. All major advanced economies are in deficit. Last night’s budget delivered the second consecutive Commonwealth budget surplus. When our government took office, gross debt was set to peak at 45 percent of GDP. As a result of our decisions, the peak is now forecast to be 35 percent of GDP, saving Australians billions in interest payments.

In an international context, the jobs market is strong too. Since we came to office in May 2022, employment has grown by 6 percent in Australia – higher than in any major advanced economy. 780,000 jobs have been created. The current unemployment rate is 3.8 percent – full employment by anyone’s definition. Our budget forecasts full employment out to 2026.

As an economist, you won’t be surprised to know that I could talk all day about economic policy. But I have only ten minutes, so there’s only time to highlight a few issues. Before you say ‘but he didn’t even mention the instant asset write-off’, remember that I have one-third as much time as the Treasurer last night.

Against that backdrop, I want to highlight three aspects of the budget: cost of living relief, productivity and gender equity, and conclude by saying a few words about how the budget affects Canberra.

First, the budget provides cost of living relief in a way that doesn’t add to inflation.

On 1 July, every Australian taxpayer will get a tax cut, with 84 percent of taxpayers getting a bigger tax cut than they would have under the previous government.

And on 1 July, all Australian households will receive a $300 energy rebate.

We’re freezing the maximum cost of PBS prescriptions. We’re boosting the maximum rate of Commonwealth Rent Assistance by 10 percent – on top of last year’s 15 percent increase.

Our cost of living policies will take another ¾ of a percentage point off inflation this year, and ½ a percentage point next year.

Inflation has been moderating. When the Albanese Government took office, inflation had a 6 in front of it. Today, it has a 3 in front of it. As you know, the Reserve Bank’s target band for inflation is between 2 and 3 percent. Our budget anticipates that inflation could enter the target band earlier, perhaps by the end of this year.

Second, our budget invests in productivity. In the 1990s, competition reform was central to boosting productivity, putting $5000 a year into the pockets of the average Australian household. A more dynamic economy means better prices, higher wages and more innovation. That’s why we’re strengthening the merger regime, reforming non-compete clauses, and taking steps to make the Food and Grocery Code mandatory.  It’s why we’re abolishing nuisance tariffs, and reducing compliance costs for business. And it’s why we’re funding CHOICE to carry out quarterly price monitoring of supermarket prices.

For Labor, productivity isn’t about cutting – it’s about investing. Investing in making Australia a renewable energy superpower. Investing in housing and transport networks that make it easier to commute to work. Encouraging more private investment in skills and supply chains. We’re also investing in people, setting a target of 80 percent of Australians having a tertiary qualification by 2050. This requires expanding opportunities for people to be the first in their family to attend university: creating more chances for people with disabilities, First Nations Australians, and people in disadvantaged communities to get a tertiary education.

We’re also making government more productive through the Australian Centre for Evaluation, tasked with carrying out randomised trials, to find out what works, and build the evidence base for the future.

Third, this budget is exactly what you’d expect from a political party where the Labor partyroom is now 53 percent women. Since coming to office, we’ve mandated gender gap reporting in large firms and funded pay rises in female-dominated occupations such as aged care. The gender pay gap is now lower than it’s ever been, but it’s still too high. In this budget, we’re changing the indexation of HECS-HELP debts for three million Australians, a majority of whom are women. For teaching, nursing and social work students, we’re introducing paid prac placements – reducing dropout rates in these critical female-dominated courses. We’re reducing the gender wealth gap by paying superannuation on government-funded parental leave. And we’re establishing the permanent Leaving Violence Program, to make it easier for women and children to leave a violent relationship.

Finally, since many of you are Canberrans, I would be remiss not to mention that the budget delivers for the bush capital. Our government has made the largest investment in the Australian Institute of Sport since its inception, alongside major investments in light rail, housing and more. This follows our investments in national cultural institutions, such as the National Gallery, which under the former government had to put out buckets when it rained.

Many Canberrans work in the public sector, and were dismayed by the mismanagement of the public service by the previous government. During the Coalition’s time in office, public service numbers fell 4 percent, while the shadow public service workforce grew to 54,000. There will always be some need for consultants and contractors, but the explosion in this shadow public service workforce was a direct result of the misguided public service staffing cap that operated for most of the Coalition’s time in office. Robodebt, the backlog in veteran claims and delays in passport processing were all a consequence of an understaffed public service.

Let me close where I began, with Arthur Boyd. Boyd once said ‘The artist is not a special kind of person; rather each person is a special kind of artist.’ The quote reflects Boyd’s generosity of spirit, and his recognition that each of us has untapped potential within us.

Many of you would have been lucky enough to see Halley’s Comet in 1986. When Halley’s Comet next comes back to earth, the year will be 2061. I hope that everyone in the room will be around to see it!

We know that the decisions made now will affect the Australia of 2061. A school leaver today will be in the midst of their career in 2061.

Their opportunities will be profoundly shaped by the choices Australia makes about tertiary education, clean technology investment, and gender equity.

Whether homes are affordable, the climate is liveable and prosperity is shared will be determined by the decisions governments make today.