The Renovation Budget

This is a renovation budget, not a new build budget.

The improved economic environment means that the Government is in a much better place than it expected to be in last October’s budget; it has been able to continue spending while still showing better fiscal outcomes than previously projected.

The focus has hence shifted from last year’s temporary, targeted and timely stimulus to instead address a range of more permanent social and economic challenges that we face as we cross to the other side of the bridge to recovery.

As a result we welcome additional spending:

• in aged care, given the Royal Commission’s clear findings that change was needed
• for young families with two or more children, facilitating more women to get back into work
• addressing infrastructure bottlenecks across the country
• providing support for upskilling in 450,000 new training places, with an additional 170,000 new apprenticeships and trainees
• to build resilience in the community, for the environment, businesses and personal mental health.

This is not a stimulus budget; this budget is about patching up existing arrangements as we emerge on the other side of that bridge.

Even with economic activity supporting projections for improved employment outcomes, the Budget does not yet paint a return to sustained above-trend economic growth necessary to repair the budget. 

A greater focus on growth is necessary to pay for our social supports and reduce the debt burden on future generations. 

Improving our growth outcomes will require more than just patching up current arrangements; we will need to see future budgets embrace more structural changes to drive economic growth. 

The significant investment in digital transformation and deregulation made by the Government in this budget are pointers to where we need to go, but we again stress the need for more fundamental reform, such as in taxation arrangements. 

Sooner rather than later we will need to use our Budget to rebuild rather than just renovate.