ANU experts give their take ahead of 2017/18 federal budget

4 May 2017

Australian Treasurer Scott Morrison will unveil the second Turnbull Government budget on 9 May.

A number of ANU experts have given their opinion on the budget and its implications for Australia.

 

Defence/Foreign affairs

Professor Rory Medcalf, Head of National Security College, Crawford School of Public Policy

"A key national security angle to watch for is how faithfully the Government adheres to its promise of a pathway to spending two per cent of GDP on Defence. This is a commitment from last year's defence White Paper but Government will need to substantially increase defence spending each year to live up to this undertaking. Amid current global uncertainty it will be important for Australia to sustain or increase its spending on intelligence capabilities."

Associate Professor Stephan Frühling, ANU Strategic and Defence Studies Centre

"In the 2016 Defence White Paper, the Turnbull Government set out a very detailed multi-year spending plan for the Defence budget. With an ambitious national shipbuilding program and a range of approvals of capability projects arising from the White Paper in the pipeline, Defence can little afford slippage from that growth trajectory."

Economics/Tax

Professor John Hewson, Chair of the Tax and Transfer Policy Institute, ANU Crawford School of Public Policy

"While Budgets have become very political documents they can still have very significant economic and social impacts. This budget is very important being delivered at a time of almost unprecedented uncertainty and unpredictability, carrying very significant risks for our economy.

"Globally, policy authorities have very limited capacity to respond to shocks, with no historical experience on which to draw. Risks are both economic and geo-political at a time where we have a flat economy, slowing, and facing a host of structural challenges.

"It is no time to 'assume' budget repair as has been done since the GFC. Budget numbers will be scrutinised for both substance and a deliverable path to surplus."

Emeritus Professor Bob Gregory, ANU Research School of Economics

"You can't do tax reform one at a time, because every time you do them one at a time you rule them out. If you look at the GST, that got ruled out. If you say you want to do something about mining taxes, the mining sector rolls you.

"They need to do a big tax summit, where all the taxes are on the table, and move forward that way. Unless that happens, we'll just muddle on in the way I've described, with budget's projections showing personal income taxes rising to Costello-era levels."

Professor Warwick J. McKibbin, AO, Director of the Centre for Applied Macroeconomic Analysis, ANU Crawford School of Public Policy

"Is Australia prepared for a major foreign shock?"

Emily Millane, Research Fellow and PhD Scholar, ANU Crawford School of Public Policy

"The 2016 Budget made some modest inroads towards reducing superannuation tax expenditure, by placing reduced caps on super concessions and limiting total contributions to $1.6 million. Given the political fallout from this, we are unlikely to see any further changes to superannuation taxation in 2017.

"There may be relief from after-tax contributions caps and the lifetime limit, however it doesn't look like there will be relief from the pension assets test, which would have greater benefit for low income earners. It also appears unlikely that the Budget will provide certainty on the treatment of deferred annuities under the pension means test."

Energy/Climate change

Prof Andrew Blakers, Director of the ANU Centre for Sustainable Energy Systems

"The 2017/18 Federal Budget needs a clear path for Australia's energy future for the 2020s, and to support Mr Turnbull's 'Mission Innovation' initiative pledge at the Paris Climate conference to double clean research and development funding over the next five years. It should also include an end to fossil fuel subsidies including diesel fuel rebate."

Dr Paul J Burke, Arndt-Corden Department of Economics, ANU Crawford School of Public Policy

"Ideally Australia's budget settings would help pave the way for a transition to a low-carbon economy. The current approach involves providing subsidies from an Emissions Reduction Fund (ERF). This approach is much less effective than our former approach of carbon pricing. The ERF is also nearly out of money. It will be interesting to see if the ERF is topped up in this budget."

Associate Professor Matthew Hole, Research School of Physics & Engineering

"To date, the Australian government has demonstrated little interest in the need for sustainable energy research and development, and poorly recognised contribution of the University sector to energy research.  A key opportunity is embracing international consortia attempting to find clean energy solutions, such as the ITER fusion energy project. Let's hope the budget offers greater investment for our future than a taxpayer bail out for an unsustainable coal mine."

Law

Professor Simon Rice, OAM, Director of Law Reform and Social Justice, ANU College of Law

"The recently announced reinstated and additional funds for community legal services has to be funded from somewhere. We will have to examine the detail of the budget to see whether the funds are new money, or come from a rearrangement of funding for public legal services or from a loss of services in another area. This will be a test of the government's commitment to the long-term social and economic benefits of ensuring access to legal advice and assistance."

Professor Tom Faunce, ANU College of Law & Medical School

"In this 2017 federal budget we are hoping to see an elimination of the Abbott's governments cuts to university funding, enhanced measures to recoup tax from corporate multinationals operating in Australia, investments in renewable energy and an increase in the renewable energy target, an elimination of the Medicare payments freeze and elimination of the F1-F2 split in the Pharmaceutical Benefits Scheme."

Foreign aid and development

Professor Stephen Howes, Director of the Development Policy Centre, ANU Crawford School of Public Policy

"What's interesting is that this is the first Federal Budget since the coalition came to power in which foreign aid is not expected to be cut, that's what I'll be looking for."

Health

Professor Simon Foote, Director of the John Curtin School of Medical Research

"Health expenditure should be directed to evidence-based services. Evidence should be based on scientific evidence and any new programs introduced should be accompanied by a period of assessment so that efficacy can be assessed.

"Successive governments have spent very large amounts of taxpayers money on programs that are not evidence based and which have no chance of success.

"Research funding into health and medical sciences should be based on peer-review. The politicisation of health research spending is a waste of funding and is likely to result in less than perfect outcomes. This is especially pertinent for the MRFF.

"Innovation is the development of new ideas that will benefit the health and wellbeing of Australians. The time scales for innovative research to come to the clinic is measured in decades. We are now benefiting from research that was done 20-30 years ago. Much of this research started as blue-sky research and gradually researchers found applications that now benefit Australians. We cannot turn our backs on innovative, basic research as this is the powerhouse of applied programs into the future."

Associate Professor David Caldicott, Clinical Senior Lecturer, Emergency Medicine

"Australia has never been under more public health duress from illicit drugs, and Big Alcohol. There are now more illicit drugs available to young Australians - including the truly deadly carfentanil- than in any other time in history. There will therefore never be a better time to address the grotesque disparity in federal expenditure between health and law enforcement to address these issues.

"Globally, there is growing recognition that a dollar invested in a health-based approach towards drugs travels much further than the same dollar spent on interdiction. Countries like Portugal that embraced this approach over a decade ago are now reaping the benefits- the Prime Minister that oversaw this transition is now the Secretary General of the UN.

"Failure to invest in this direction - now- could have public health implications for Australia over the next two decades that are rivalled only by ignoring the public health implications of climate change.

"The scientific expertise is very clear- whether our elected officials have the moxie to take up the challenge will determine the nature of their future legacies."

Immigration

Henry Sherrell, Research Officer, ANU Development Policy Centre

"Immigration has become a major point of public debate. Since the last election, it is clear the Turnbull government is concerned about public perception and immigration policy. The Budget, particularly whether the number of permanent residency visas is reduced, will shed light on where to next for the public debate."

Science and innovation

Professor Lisa Kewley, Director of the ARC Centre for Excellence in All-Sky Astrophysics in 3D, ARC Laureate Fellow, Research School for Astronomy & Astrophysics

"The government's National Innovation and Science Agenda was released over a year ago.  If Australia wants to be internationally competitive in an increasingly technological world, the government needs to deliver on this agenda.  

"Continued funding cuts to universities and increased fees for science degrees shrink the STEM workforce.  In this budget, the government needs to fund innovative technology and infrastructure, and to help cultivate a larger STEM workforce."

Dr Gaétan Burgio, Department of Immunology and Infectious Disease, The John Curtin School of Medical Research.

"It would be interesting to see if the government is committed to his promises towards, Science, Technology and Innovation through its innovation agenda. A substantial investment towards medical research in Australia is expected. This will lead to better health outcomes to Australians.

"As promised from the government, strong investment in developing the STEM sector would ensure creation of jobs and fuel innovation. A continuity in the infrastructure investment would be crucial for the country to maintain its research capability and ensure Australia's international competitiveness.

"We will see if the promises for incentives for entrepreneurship and collaboration public-private sector as part of the innovation agenda will hold."

Arts

Emeritus Professor Sasha Grishin AM, ANU School of Literature, Languages and Linguistics

"Successive federal government budgets have in various ways cut funding in real terms to the Australia Council, such as the Catalyst Fund.  Will this budget restore funding to the Australia Council?

"In the past couple of budgets there have been particularly savage cuts to the national cultural institutions such as the National Library of Australia, National Gallery of Australia, National Museum - will these cuts in the form of the so-called 'efficiency dividends' be continued in this budget.  

"So far they have resulted in severe staffing cuts and have affected functions, including Trove at the National Library.

"Will there be any bricks and mortar commitments to cultural institutions, for example, extensions to the National Gallery."