5 things you need to know about the federal budget
1. Could this be a major infrastructure budget?
Adjunct Professor Martin Locke from the University of Sydney Business School says, “we can expect this to be an infrastructure budget with Scott Morrison reiterating the previously announced commitments to funding the airport rail link in Melbourne and the north-south rail link adjacent to Western Sydney Airport."
"The key question is whether a commitment to fund Cross River Rail in Brisbane will be made to match Labor’s election promise and go against Infrastructure Australia’s advice.”
2. NDIS funding a legislated fact
“The National Disability Insurance Scheme (NDIS) is a legislated fact. Therefore its funding has to be fitted into a government budget along with all other expenditure," says Professor Richard Madden from the University's Faculty of Health Sciences.
“Australia rarely uses hypothecated, or earmarked, taxes. The government's decision not to proceed with the Medicare levy increase and the associated dedication of the revenue is a step in line with good public finance.
“The existing funding for the NDIS (from the 2014 Medicare levy increase of 0.5 percent, state government payments to the Commonwealth and offsets from programs being replaced by the NDIS) is not, and never was, hypothecated.”
Professor Madden is co-stream leader for the National Disability Insurance Scheme in the University's Centre for Disability Research and Policy.
3. Balancing corporate and personal income tax
“Tax is one of the most complex issues in this budget and the federal government will be taking a careful look at corporate income tax and personal tax income structure," says Dr Shumi Akhtar from the University's Business School.
An expert in corporate finance as well as welfare, retirement and pension systems, Dr Akhtar says tax plays a critical role for retirees’ well-being.
"Now is the time for the Australian government to reflect on the upcoming budget by revising the outdated tax policy for individuals (pensioners/retirees and current work force) and corporations in a fair, robust and sustainable manner to maintain a healthy financial system and well-functioning economy.”
4. Cashless debit card: more research needed
“The federal government continues to commit to trialling the Cashless Debit Card (CDC) in the May 2018 budget as a means to address the behavioural causes of social disadvantage and harm; yet there is no convincing evidence based on sound research that shows the CDC reduces harm," says Associate Professor Stefanie Schurer from the University's School of Economics and Charles Perkins Centre.
“Our own research produced at the University of Sydney demonstrated that the initial rollout of income management, as it was then called, led to negative effects for children.
“The cost of administering the CDC is $9,000 per person, per year, in current trial sites, almost as much as the average amount of welfare payments being quarantined. We need more statistically sound evidence on whether, and how, this arguably paternalistic and extremely expensive policy leads to unintended consequences before committing to new trial sites."
5. Under-employment and rising skills of workers
“While Australia’s unemployment rate is relatively good by world standards, our labour market is afflicted by deep seated problems," says Professor John Buchanan, Head of the Discipline of Business Analytics.
"Prime among these are under-employment and the paradox of rising skill levels coinciding with employer complaints about the relevance and quality of workers’ skills. The key challenge is not just adequate levels of funding for education and skill development – but how those funds are deployed.”