The Budget is an opportunity for the Government to protect Australian jobs, secure economic growth, and address the challenge of rising inequality. The Government should not take the low road of confected fiscal crisis and cuts to jobs and services.
In this submission, the ACTU calls on the Government to:
- Create an Australian Jobs Plan;
- Adopt a short-run fiscal strategy that won’t harm jobs and growth;
- Resist short-sighted cuts to public services;
- Implement a proper, comprehensive spending review process rather than the Commission of Audit;
- Conduct a tax review with representation from a broad range of sectors, including unions;
- Increase Newstart Allowance and index it to wages;
- Reform superannuation tax concessions; and
- Retain vital, profit-making Government assets.
We also outline the economic context for the Budget. We note that while the Australian economy has performed very well in recent years relative to virtually all other advanced economies, the past six months have seen the largest drop in employment in over a decade. Tighter fiscal policy would make this worse.
We carefully examine the fiscal context, showing that Australia’s net debt remains very low by international standards, and our structural budget balance is on a sound trajectory. We argue that the main long-run budget problem, to the extent we have one, is a structural decline in revenue due to the unsustainable tax cuts of the mid-2000s.
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