State and Federal Political, Economic & Budgetary Overview - - PowerPoint PPT Presentation

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State and Federal Political, Economic & Budgetary Overview - - PowerPoint PPT Presentation

Mar 02, 2023 168 likes •554 views

State and Federal Political, Economic & Budgetary Overview John Phillimore Executive Director John Curtin Institute of Public Policy Curtin University 1 Federal & WA Politics: similarities 1. Liberal-National governments 2. More

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State and Federal Political, Economic & Budgetary Overview

John Phillimore Executive Director John Curtin Institute of Public Policy Curtin University

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Federal & WA Politics: similarities

1. Liberal-National governments 2. More than a third of the way into their term 3. Solid majorities in Lower House 4. Minority in Upper House 5. Budget problems 6. Broken promises 7. Polling problems 8. BUT Labor not really capitalising

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WA voting intentions (Newspoll)

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WA 2PP voting intentions (Newspoll)

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Federal voting intentions (Newspoll)

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Federal 2PP voting intentions (Newspoll)

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Federal & WA Politics: differences

Federal Government silver lining

  • 1st term
  • National security & foreign affairs

But WA Government has some advantages:

  • Still has 2.5 years to go
  • Has a much bigger electoral buffer
  • Leg Council ≠ Senate
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Reform Malaise?

Paul Kelly (The Australian); Ross Garnaut

  • 1983-2000: the reforming years
  • Post-2000: policy stagnation & failures, opposition to reform

Obstacles:

  • Organised interests
  • Loss of bipartisanship
  • Media
  • Implementation failures
  • Loss of government and party capacity, authority, trust
  • Public expectations, ‘no losers’ veto
  • Complacency

Examples:

  • Local govt, shopping hours (WA); carbon & mining taxes, GST (Fed)
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‘Salad Days’: 2000 - 2013

Australia – an international standout:

  • 22 years uninterrupted growth
  • Rising incomes and wealth
  • Low unemployment, high job growth
  • Low levels of public debt
  • Came through Asian crisis (1997-8), tech wreck (1999-2000), GFC

(2008) Based on:

  • Record terms of trade (commodity prices)
  • China boom
  • Massive mining investment
  • Legacy of market reforms, strong institutions, policy innovation
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Real GDP growth, 1990 to 2013

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Source: Bankwest Curtin Economics Centre, Curtin University

Growth in incomes across the board

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Average weekly ordinary time earnings, 1990 to 2013

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TERMS OF TRADE

Source: Reserve Bank of Australia

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Australian Dollar Soars

Source: fxtop.com

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Resources boom, phase 1: Prices (iron ore $/t)

Source: Bureau of Resources and Energy Economics

20 40 60 80 100 120 140 160 180 Mar-99 Aug-99 Jan-00 Jun-00 Nov-00 Apr-01 Sep-01 Feb-02 Jul-02 Dec-02 May-03 Oct-03 Mar-04 Aug-04 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13

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Resources Boom, Phase 2: Investment

Source: Reserve Bank of Australia

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‘Dog Days’ ahead?

1. World economy – looking shaky 2. Security fears – IS, Ukraine, Ebola 3. Resources – moving to production phase 4. Lower commodity prices 5. ‘Dutch disease’ – impact of high dollar 6. High cost base 7. Climate change 8. Budget problems 9. Employment and growth slowing

  • 10. Soft or hard landing?
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WA Fiscal Situation

  • 1. Key issues

i. Loss of Triple A credit rating ii. Falling and volatile revenues – GST, royalties (lower iron ore prices), Commonwealth grants iii. Increased debt iv. Controlling expenses growth 2. Strategy i. Privatisation ii. Controlling expenditure (wages, capital investment) iii. Renewed focus on GST issue

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Source: WA Department of Treasury

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Source: WA Department Of Treasury

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Source: WA Department Of Treasury

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Resources Boom, phase 3: Production

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Iron Ore Price

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Federal Focus

  • 1. ‘Crisis, what crisis?’: BAU vs. ‘Budget emergency’
  • 2. Budget issue is real: Hockey, Garnaut, Grattan, PBO

i. Revenue base has not recovered ii. Expenses growing iii. Legacy commitments – NDIS, schools iv. New policy commitments – defence, PPL, Direct Action v. Productivity weak

  • 3. Equity and fairness

1. Budget initiatives 2. A revenue or an expenditure problem – or both? 3. Future focus: benefits (yes) vs. tax expenditures (no)

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Federal Budget Trends

Source: Grattan Institute

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Long-term budget challenge

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Implications for Community Sector

1. Money will remain tight even as disadvantage increases 2. WA Government will try to retain sector’s support 3. Federal Government targeting benefits / entitlements

i. Work focus, mutual obligation ii. Simplification of benefits iii. Eligibility tightening iv. Inquiries: McClure, Forrest, Childcare (PC), Empl services v. Use of NFPs for service delivery

4. Andrews agenda remains: pro-family, deregulation 5. Federalism White Paper:

i. Linked to tax reform White Paper ii. Issues papers: health, education, housing & homelessness, finances