What is the top election issue for economists?

Ahead of the Federal Election, the 50 economists on the National Economic Panel were asked to pick the issues they will believe will matter most for the election and incoming government.

Here is the list of issues the economists were given. They were asked to identify 3 top issues.

• Climate and environment
• Defence
• Education
• Employment/wages growth
• Health
• Housing availability and affordability
• Immigration
• Lower taxes
• Social support
• Support for businesses
• Tax reform

A resounding 3 out of 4 economists nominated climate and environment as the most pressing issue.

When asked, I too nominated Climate and environment, along with Housing availability and affordability and Employment/wages growth.

Addressing the economic challenges of climate change and housing affordability and accessibility and homelessness requires long-term foresight, investment and commitment at Federal Government level.

Currently market forces are not steering us towards the most economically effective, efficient and equitable directions on these issues. But government intervention also needs to be intelligently informed by thorough evidence-based economic analysis of the alternative forms of government intervention.

When it comes to job security and wages, real wages growth is not yet evident despite tight labour market conditions. Partly this is because the conditions that have given rise to a tight labour market have come from supply-side constraints (pushing up production costs), moreso than booming demand (that would theoretically generate higher revenue, enabling employers to pay their workers more).

Wage growth requires productivity-enhancing investments on the supply side of the economy. Think skills, innovation, research, digital infrastructure, and dismantling barriers to workforce participation. But it also requires a system where improvements in labour productivity flow through to wages.

Even before the pandemic, this productivity-wage transmission mechanism had been weakening over time, with a larger share of productivity gains being channelled towards capital owners (shareholders, investors, employers) instead of workers.

This is where institutional settings, such as the role of industrial relations tribunals and mechanisms for wage determination, matter.

Tax reform as a tool

Many economists are likely to agree tax reform is needed, for efficiency and equity purposes, and in the interest of future fiscal sustainability.

But tax reform is a "tool" or mechanism, rather than an end goal in itself.

Each political party is going to have a different idea of what tax reform should look like.

What is missing on this list?

This list is missing two big issues: childcare and aged care. These issues continue to be sidelined and deprioritised as less important than other portfolios, despite being essential to an optimally functioning economy.

Getting the economic settings right in our childcare and aged care systems – including wage structures and working conditions – will factor into wider economic outcomes including labour force participation and wage growth.

Addressing violence against women is also an issue that many voters want to see dedicated action on.

The Women's Budget Statement this year included a strong focus on women's safety, but total expenditure was a drop in the ocean compared to other government priorities.

The budget announced a total of $2.1 billion for initiatives to support for women and girls (covering safety, health, parental leave, and all other relevant initiatives). By comparison, defence received an extra $2.3 billion, taking total defence spending to $38.2 billion. Roads received an extra $3.6 billion, taking total spending on roads to $12.3 billion.

Full responses of all members of the National Economic Panel are published by Peter Martin in The Conversation on 10 April 2022.