Tuesday , August 9 2022
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How small a target: taxation and expenditure

Summary:
I was puzzled by Anthony Albanese’s Budget reply speech in May this year, which put forward only one alternative policy, a “ billion social housing fund”, which proved on inspection to be an off-budget piece of spurious financial engineering that, if all went well might generate 0 million a year for housing. The government already has four or five similar funds and of course the much larger Future fund. What puzzled me was that Albanese’s response seemed to fall between two stools: either criticise the budget and save your own policies for later, or respond by making a big announcement of your alternative expenditure policy. Six months later, the answer is clear. The social housing fund is Labor’s big alternative budget policy. There’s also an expansion of support for

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I was puzzled by Anthony Albanese’s Budget reply speech in May this year, which put forward only one alternative policy, a “$10 billion social housing fund”, which proved on inspection to be an off-budget piece of spurious financial engineering that, if all went well might generate $500 million a year for housing. The government already has four or five similar funds and of course the much larger Future fund.

What puzzled me was that Albanese’s response seemed to fall between two stools: either criticise the budget and save your own policies for later, or respond by making a big announcement of your alternative expenditure policy.

Six months later, the answer is clear. The social housing fund is Labor’s big alternative budget policy. There’s also an expansion of support for child care, announced in response to the 2020 budget, and largely matched by the government in 2021 (Labor’s policy is still significantly better for families with income over $100k, and only one child in care, and somewhat worse for the relative small group of families with three or more children in care).

Apart from that, as far as I can tell, zilch.. Labor has promised to implement the tax cuts for high income earners which were passed with bipartisan support after the 2019 election. And its rhetoric on “budget repair” (aka austerity) is identical to that of the government. So, there’s no room for much new spending.

Still, there are presumably some goodies being saved up for the campaign. I’m hoping that the list will include an increase in Jobseeker to somewhere near the poverty line, but I’m not confident.

Of course, there are other issues beyond Budget policy. I may try to write a bit about those later.

John Quiggin
He is an Australian economist, a Professor and an Australian Research Council Laureate Fellow at the University of Queensland, and a former member of the Board of the Climate Change Authority of the Australian Government.

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