Community Newsletter

Budget Analysis - 2022!

29 March 2022

BUDGET ANALYSIS 2022!

Tuesday 29 March 20222

 

Tonight, the Federal Government released their 2022-2023 Budget outlining how it plans to allocate funds. My team and I have been analysing what it means for you and your families in Warringah.
 
The Government claims this budget was all about easing the cost of living pressures. Headline policy items include the return of the $1080 ‘Low and Middle Income Tax Offset’ and a new one-off $420 tax offset for people earning less than $126,000 - both will affect 6.7 million Australians. There will also be a $250 tax exempt payment to pensioners, veterans and eligible concession card holders - which will affect 6 million Australians. There is also the halving the 44c per litre fuel excise at a cost of $5.6b over 6 months, but nothing for electric vehicles.
 
For Warringah, we saw $75million go towards the much-needed upgrade to the Wakehurst Parkway which is scheduled to be finished in 2025.  There are also some important extensions to grant programs like the popular ‘Stronger Communities Program’ that will support local organisations with facility upgrades.
 
However, locally, there is no funding for the Beaches Link Tunnel nor meaningful funding for the Sydney Harbour Federation Trust. But there is $17.9b in spending on other infrastructure projects around the country.

Importantly, we now know what the cost was to Australia to secure Barnaby Joyce and the Nationals’ support for net zero: about $21 billion!
 
Overall, the Budget is extremely short term and geared towards the upcoming federal election with overt pork barrelling in marginal seats. It does not address the structural challenges the economy is facing which include flatlining wages growth, stagnant productivity, growing debt levels, worsening climate change and degradation of the environment.
 
Some analysis of the Government’s Budget is set out below.

 

ECONOMY                     
                                                                       

Progress Made
Falls short

$1bn for a ‘Technology Investment Boost’ for small businesses to go digital, small bus with annual turnover of $50m will deduct 20 per cent of cost of expenses of digital asset, will apply for eligible expenditure of up to $100,000. This will be essential in pivoting to a more digitised economy.
 
  ✔

$56m to help women to transition into tech industry, manufacturing and entrepreneurship and $45m for STEM. This is not enough considering women make up only 28% of the STEM workforce and STEM achievements are declining in schools and universities.
 
 
  X
 

$550m for a ‘Skills and Training Boost’ which is 20% bonus deduction for external training courses to upskill employees. This will ideally address skill shortages for business.
 
 
 
  ✔

$2.8bn to upskill apprentices and a Australian Apprenticeship Incentive System. This is a significant investment in a sector that received huge support during the pandemic and continues to enjoy large public subsidies.
 
  X

 
Comments
This budget contains some measures to support innovation such as

  • the $2.2bn for ‘Australia’s Economic Accelerator’ which will support commercialisation of research;
  • the ‘Technology Investment Boost’;
  • ‘Skills and Training Boost’; the $114m for quantum; and $124m for artificial intelligence.


Unfortunately, these policies are overshadowed by lagging investment in research and development as a proportion of GDP.

For example, as at 2020, Australia only invested 1.8% of GDP in R & D. This is compared to China’s 2.44% of GDP last year. China aims to dominate future technology, and this poses a threat to our prosperity over the long term. A broadening of the R & D Tax Incentive and Angel Tax Incentives as well as an increase in funding competitiveness.

This budget also lacked funding for distressed industries that have been affected by COVID lockdowns. The tourism sector only received $146m despite going into lockdown first and there was nothing for hospitality. Similarly, the infrastructure expenditure of $17.9b in marginal seats skews towards the male dominated construction industry, despite women suffering the brunt of the COVID recession. Much more can be done on inclusion.

In contrast, here is my New Economy Policy – an outline of how Australia can prosper through a sustainable, innovative and inclusive approach to business. Australia is the lucky country but being lucky does not mean future success is guaranteed. Imagine a smart New Economy built on sustainability, inclusion and innovation which uses fiscal discipline and circular principles to build back better. We have many challenges ahead but also plenty of opportunities.
 
To view my New Economy Policy click here. It’s a policy that future-proofs Australia’s economy whereas tonight’s Budget from the Government is disappointing with cynical short term goals ahead of an election.

 


CLIMATE

Climate change got a mere 60 second mention during the Treasurer’s 35 minute speech. The Government has failed to meaningfully fund climate adaptation or transition to Net Zero. 
 

Progress Made
Falls short
$100m for concessional tax treatment for carbon abatement and biodiversity stewardship income which supports climate action. A caveat is that much more will be required to reach Net Zero by 2050. We roughly need to plant an area of Tasmania to reach our goal.
  ✔

$50m to accelerate the development of priority gas infrastructure projects and carbon capture and storage pipeline infrastructure. This will further entrench fossil fuels in our energy system that will make combatting climate change more difficult.
 
  X
$84 million for 60 community microgrid projects in regional and rural Australia which will increase grid resilience and create local jobs. A caveat is that none of this is earmarked for cities.
  ✔

$10.8bn to support people buying fuels including $7.8bn in fossil fuel tax credits to industry and $3bn for halving the fuel excise for 6 months - but nothing to accelerate a transition to electric vehicles
 
  X
 

  
Comments
The funding for new climate change programs was poor at best. There was significant funding earmarked for the Pilbara and Hunter industrial regions totalling $2.25bn. aiming to diversify their economies and shift to low emissions metals production and manufacturing. However it’s unclear if this pivot to low emissions will be enabled by controversial carbon capture and storage with further funding to expand coal and gas exports.
 
Climate change got a mere 60 second mention during the Treasurer’s 35 minute speech yet climate fuelled disasters are costing our nation dearly. We face the recurring cycle of reacting to disasters not mitigating against them. Right now, we’re seeing the costs of poor climate planning play out. The floods in Northern NSW and QLD are already costing $6billion to the budget bottom line this year alone. This enormous cost outstrips the $2.8billion Black Summer bushfires of 2019-2020 and the $1.5billion Queensland floods of 2019.

If we fail to adapt and mitigate we will be doomed to repeat a costly cycle of disaster reaction.
 
What is also missing is funding for electricity transmission and Renewable Energy Zones, industry electrification, agriculture decarbonisation and innovation and importantly a fund to help Australian communities to transition to new clean export industries.  Overall, much more can and should be done for the climate.
 
In contrast, my 5 Steps to Net Zero delivers a clear roadmap for emissions reduction. You can view the policy here




HEALTHCARE
 

Progress Made
Falls short

Significant contributions to health preparedness and modernisation including:

$2bn for winter immunisations

$1.3bn for Medical Research Future Fund 10 year plan and

$2bn for the mRNA manufacturing facility

 
  ✔
$80m Funding for the genetic testing for parents only concentrates on 3 genetic diseases rather than the full range of over 750 diseases currently tested for by Mackenzie’s Mission
 
  X

$547m for mental health including $52.3m for Lifeline as well as $206m for youth with severe mental illness
  ✔
No funding for Royal Far West holistic rural and regional health program
  X

 
Comments
Much of the funding for the health system continues to focus on pandemic response and preparedness for future variants. I was pleased to see the commitment to the 10 year National Plan to Primary Care Reform and the implementation of a National Workforce Mental Health Plan for frontline health workers who have been stretched throughout the pandemic. But more is needed.
 
The increased funding for hospitals is also welcome; I will be interested to see the distribution of that funding and whether the expansion will address any of the concerns constituents have with the operations at Northern Beaches Hospital in particular the provision of targeted mental health services and facilities for our youth.
 
This is just one of the issues I address in my Modern Healthcare policy which you can view here
 



INTEGRITY
  

Progress Made
Falls short

The Australian National Audit Office gets a welcome further increase in staffing from 335 to 379.
 
  ✔
No new money has been set aside for a National Integrity Commission
  X
ABC and SBS funding locked in and indexed to CPI over next 3 years to a total of $4.3bn
  ✔
“Pork Barrelling” with significant infrastructure investments in marginal seats – only 15% of the infrastructure spend has been endorsed by Infrastructure Australia
  X


Comments

Integrity measures do not feature strongly in the budget. The lack of substantial funding measures for the Australian National Audit Office, the National Integrity Commission and or any new funding for the Australian Electoral Commission shows that the Coalition Government has no desire or intention to strengthen or enhance integrity and transparency measure. Add to this the further evidence of pork barrelling, including the almost $2b for ‘decisions taken but not yet announced,’ and a lack of due process on announced infrastructure investments and there is a distinct absence of accountability.
 
For my platform on Integrity, visit my website here
 
 


ENVIRONMENT
 

Progress Made
Falls short
 Sadly, nothing to report ...
 

$11.5m for the Sydney Harbour Federation Trust. It is anticipated that the Trust needs $100 million - $120 million to complete much needed upgrades and maintenance at the North Head and Middle Head sites alone.
 
  X
   

$192m for environmental reforms including funds to develop 10 bioregional plans that allow project developers to skip environmental approvals thereby reducing environmental protections. This is directed at facilitating the development of mines.
 
  X
   

$1bn for the marine science to build Great Barrier Reef resilience, including for water quality measures. This will not be effective as climate change is the biggest threat to the Great Barrier Reef.
 
  X
   

$100m for an extension to the ‘Environment Restoration Fund’ for community action to protect the environment. This is simply insufficient to reverse our current rate of biodiversity loss.
 
  X
   

$83m for waste and recycling capabilities including $60m for plastics recycling and $18.2m for an awareness campaign on recycling and ‘ReMade in Australia Scheme’. This is just a fraction of what is needed to address the issues of waste and plastics.
 
   X

 
Comments
Tonight’s environment funding announcements were tokenistic at best. Like last year there were some small measures for the environment. Unfortunately, overall support for protecting our environment is not commensurate with the challenges we face, including habitat destruction and extinction crisis.
 
To put things in perspective only $1.6bn will be spent nationally on the environment compared to $6.4bn for three of Barnaby Joyce’s handpicked regional dams, which all have questionable business cases and will adversely impact on the environment.  As a percentage of GDP, environment spending was only 0.08%, compared to 2% of GDP that will be spent on defence this year.
 
Both the investment for the Great Barrier Reef and for Antarctic Research will be simply ineffective considering that climate change will decimate both. Similarly, although it is positive more money is being spent on recycling, the waste system in Australia needs systemic change that will require significant public investment, not the small amount that will be spent this year to become circular. As for the local environment, the Sydney Harbour Federation Trust will only receive $11.5m which is well short of the over $120m they requested to carry out much needed works at the North Head and Middle Head sites alone.
 
For my platform on Local Environment, visit my website here.
 



EQUALITY
 

Progress Made
Falls Short
$346m for a paid parental leave expansion and sharing – 20 weeks shared between both parents up from 18 weeks for mum and 2 weeks for dad and eligibility change to below $350,000 family income threshold instead of the outdated $151,000 mother’s pay threshold.
  ✔

In regards to the treatment of refugees, it’s d
evastating that the Government continues to highlight the expansion of the number of Afghan nationals it will take within the humanitarian program without expanding the total number of places within the program. Under the current commitments 31,500 places out of 55,000 humanitarian places will go to Afghan nationals – nearly 60%.
 
   X

$1.3bn to support the National Plan to End Violence against Women and Children 2022-2032 with measures identified across all pillars of the National Plan

 
  ✔
No real changes to childcare affordability, aged care or NDIS funding
  X

 
Comments
The most significant shift to support gender equality are the changes to Paid Parental Leave which make the system far more equitable and remove many of the barriers to men taking up the scheme that currently exist. The changes are welcome but they still leave Australia as one of the least generous in the OECD. Interestingly the Government is funding UNICEF and [email protected] for $1.4m to support reviews of inclusive parenting policies in industry but there has been no commitment to implementing the policies they recommend in the public sector.
 
Two Indigenous issues that I had raised with Minister Wyatt were well funding in this budget - $636m over 5 years for Indigenous Rangers – I will encourage the deployment of some of these rangers to North Head and Middle Head in Warringah to protect our Indigenous Heritage. $316.5m over 5 years for the Ngurra Cultural Precinct in the Parliamentary Triangle including National Resting Place and Aboriginal and Torres Strait Islander Knowledge Centre, home for AIATSIS and gallery spaces – I had campaigned for the cultural precinct at the Manly aquarium site but welcome this fitting development in the Parliamentary triangle.
 
Housing affordability measures outlined in the budget will likely have little impact on Warringah unfortunately with the exception of the $2bn increase to the ‘National Housing Finance and Investment Corporation’ cap increasing support to 8,000 more social and affordable dwellings including for older women which may lead to the creation of more places for women.
 
For my platform on Equality, visit my website here
 
 
CONCLUSION:

This is a short term budget that fails to address the very real challenges that we face as a nation and nor does it embrace the many opportunities.
 
The Government committed to Net Zero and yet hasn’t included anything in this budget to achieve that target.
 
Across the board, there are so many areas that require more work and more funding.
 
I would be keen to hear your feedback on tonight’s budget so feel free to contact my team with your thoughts or your questions – [email protected]