In the lead up to the Federal Budget the team and I have been focused on pulling together content and information to inform your understanding and reactions. There is considerable analysis available from CEDA in a variety of formats, including podcasts and blogs to livestream events next week with both the Treasurer and Shadow Treasurer.
We have come to expect the ‘pre-announcement’ of Budget initiatives and this year has been no exception, albeit on a different scale with announcements covering everything from advanced manufacturing, infrastructure, and wage subsidies for apprenticeships to the digital economy. There has also been plenty said about personal income tax cuts.
What’s still to come? Further action to support business investment would be welcome. But overall, it looks like Tuesday night will be focused on households and families. What we haven’t seen to date, and should be looking out for on Tuesday night, are initiatives relating to social infrastructure, including social housing, child care and aged care, which would be welcome, not least because of the paucity of measures to date related to the so-called ‘pink recession’. As Elizabeth Hill highlighted in CEDA’s recent Labour Market Policy after COVID-19
papers, international research shows this investment produces five times more direct jobs than construction overall and more jobs for women.
Those who have long campaigned for an increase in unemployment benefits, including CEDA, will also be hoping for a substantive and permanent increase in the JobSeeker payment, which would be good for recipients as well as the economy.
While acknowledging the scale and importance of near-term stimulus, many commentators have remarked that few if any of the announcements to date will fundamentally reshape our economic future. In other words, what is missing is a long term growth narrative or agenda. This matters because confidence in our economic future (and hence the prospects for employment) will also boost the impact of near term measures, so I am hoping tomorrow we will see signs of the more fundamental changes and reform needed to power long term growth. As the Treasurer himself has conceded, there are big holes left by population growth, and the boost we have enjoyed from labour force participation is also likely to stall in the face of a weak labour market, leaving productivity to do all the lifting in the face of very strong headwinds. CEDA’s recent labour market policy papers also examined the role of wage subsidies
in driving Australia’s economic recovery.
Finally, while there is always a degree of interest in Treasury’s underlying modelling assumptions, this year there will be plenty of attention on one unique set of assumptions, namely anything and everything to do with domestic and international mobility and the impact and timing of the arrival of a COVID-19 vaccine.
We will be releasing our thoughts on the Budget in an update for CEDA members on Wednesday, so look out for that in your inbox.
In keeping with all things Federal Budget, if you are interested in further insights and pre-Budget analysis, I encourage you to listen to my latest podcast with Deloitte Access Economics Partner, Nicki Hutley; HSBC Australia Chief Economist, Paul Bloxham; and EY Oceania Chief Economist, Jo Masters where we discuss what to expect in this historic budget for the latest episode of our podcast series The Economists’ Corner
. Listen here
Later this week I will be catching up again with Nicki, Paul and Jo for part two of our discussion to analyse how the Budget stacked up relative to their expectations and priorities. Our Chief Economist Jarrod Ball will also be catching up with a couple of young Australians to gauge their reactions to the budget, considering the heavy hit to young people’s prospects from COVID-19.
While over-shadowed by all this Budget, it is also worth checking out the global digital competitiveness rankings released late last week. The IMD World Digital Competitiveness Ranking (WDCR) showed Australia has fallen for the second year in a row, down to a rank of 15 out of 63 nations. Our key weaknesses remain communications technology and business agility. You can read more here
. CEDA is the Australia partner for the rankings.
As noted above we have seen a series of policy announcements addressing our digital and technological competitiveness. They are a good start, but what is lacking is a strong and connected picture of how we will sustainably lift our capabilities and competitiveness.
One silver lining of the COVID-19 pandemic has been the speed with which we have embraced digital opportunities. While the rapid adoption of digital opportunities has been a positive, we must now seek to excel in this era of digital globalisation. Understanding the drivers of digital and technological competitiveness and seizing the opportunities will be critical to future jobs and economic growth as we emerge from the COVID-induced recession.
This week we will hear from Federal Department of Health Secretary, and former Chief Medical Officer, Dr Brendan Murphy, in the livestream event Australia’s health system – integration and sustainability
, on Thursday 8 October. Australia’s world-class health sector has so far met the challenges of the COVID-19 pandemic, yet the burden on governments to fund health services continues to grow, driven by an ageing population, expensive medical interventions and community expectations. This event examines new thinking to improve health outcomes and sustainability. Other speakers include: Telstra Health Managing Director, Professor Mary Foley AM; Bupa Director of Clinical Governance, Dr Zoe Wainer; and PwC Australia National Health Leader, Sarah Butler. Register here
As mentioned above, next Monday join me for A conversation with Treasurer Josh Frydenberg
. Having handed down the most important Federal Budget in generations, delivered against a backdrop of a once in a century pandemic, the Treasurer will share his insights into the key investments, decisions and plans for economic recovery. Register here
Also next week is the Budget response by Shadow Treasurer, Jim Chalmers
on Thursday. This livestream will provide the Opposition’s response to the Budget. Register here
I also encourage you to check out our One question with
NSW Minister for Customer Care, the Hon. Victor Dominello. The Minister recently spoke at a CEDA event and this new format gave members and the CEDA team an opportunity to ask one question each of Minister. We hope to do more of these with key speakers in the future.
As mentioned above, our pre-Budget discussion is available here
and don’t forget to look out for part two later this week.
CEDA’s Chief Economist, Jarrod Ball, writes that the Federal Budget needs to prepare us for the wave of business failures and restructures we can expect in the coming year. Read his article here
Out today, Swinburne University of Technology, Centre for Transformative Industry Director, Professor Beth Webster, has provided analysis for CEDA looking at the Federal Government’s recently announced Modern Manufacturing Strategy ahead of the Federal Budget, saying it is aligned with world-best industry policy, but it will need to clear some key hurdles if it is to generate the growth our economy needs. Read more here
University of Technology Sydney Professor of Health Economics, Michael Woods, considers the likely outcomes of the upcoming Federal Budget for aged care funding and discusses the opportunities for reform. Read more here
Co-ops and SMEs
Following the announcement of the Federal Government's Modern Manufacturing Strategy, Business Council of Co-Operatives and Mutuals (BCCM) CEO, Melina Morrison, argues that the co-op model can help deliver the innovation and growth that Australia needs by allowing SMEs to more safely scale and invest in research and development. Read more here
A special call out to our new state member Ericsson – it is great to welcome you to the CEDA community – and also thank you to our renewing national and state members this week.
New state member
Renewing national members
National Australia Bank
Renewing state members
City of Playford (SA)
Maribyrnong City Council (VIC)
Treasury Corporation of Victoria (VIC)
UNSW Sydney (NSW)
Wyndham City Council (VIC)
As always, stay safe.