When Josh Frydenberg rises to deliver his second budget today it's not fanciful to imagine parenthood as a template for sorting through some of the equity issues budget-making involves. The gnawing fairness questions confronting families are of a kind that resonate with sorting the nation's finances. The concern should be - is it fair? Is it equitable? Is it equal?
Is it fair that this child is supported to go to a particular (and expensive) summer dance school while the other/s stay home? Another child may be great at tennis - so as parents we ferry them around the city and the state dragging the other/s with us. No two children get exactly the same treatment. As parents, we strive to ensure each child receives their fair share of experiences, opportunity and support according to their needs, talents and interests.
Juggling the national accounts, let us hope the Treasurer carries forth the domestic mantra of concerns - is it fair? Is it equitable? Is it equal? In doing so, he cannot help be aware that one of the most glaring structural weaknesses exposed by the pandemic in our economy and society has been the scale of inequality - or lack of fairness - quietly building behind the headline-grabbing long run of economic growth. This inequality is manifested in many ways: declining real wages and growing income disparity between the very rich and the poor; the huge shift to casualised work; our lack of value placed on the work of care (for the aged and for our children), as well as our nursing and public health workers and our teachers.
So much of the burden of the crisis has been borne by younger workers and, in particular, on women. Women, we know, have lost jobs at a higher rate than men, withdrawn more from the labour market to care for or home-school their children and have been over-represented in industries that have been most impacted by the forced shutdowns and social distancing measures. More than ever, women make up the majority of lower income and insecure workers and still perform the disproportionate amount of care and work in the home.
There are those who argue that inequality is self-perpetuating, produced by the vast amount of political power the wealthy hold to influence legislative and regulatory activity. American economist, Joseph Stiglitz notes that, while the growing wealth divide across the world has been in part brought about by globalisation and technological advancement, "politics have shaped the market, and shaped it in ways that advantage the top at the expense of the rest." Stiglitz blames this use of power by the wealthy as the cause of inequality, by helping to shape monopolies, elicit favourable treatment by the government towards wealthy individuals and corporations, and put downward pressure on taxes. The end result he argues, is not only unjust and unfair, but also harms productivity in the economy.
Let us hope that Stiglitz is part of the Treasurer's night-time reading and his daytime thinking and resolve. For today's budget is no doubt more critical than any delivered over the past decade as it endeavours to paint the government's vision for a post-pandemic recovery. With the way we live and work fundamentally altered and so savagely exposing fault lines in our social and economic structures, this budget is the critical first step to re-building a more equitable post-COVID-19 world.
Each year's budget is written in the language of core values, beliefs and priorities. This budget is no different although its mission is manifestly clearer. It needs to address fundamental weaknesses and biases within Australian society that, if left untended, will inhibit our future prosperity. Yet is the Treasurer heeding what we imagine is his own domestic experience and learning from what we hope is his bedside reading? All the hints so far suggest that the government is following its previous, outdated playbook - looking to build big infrastructure across the nation, to bring forward regressive tax cuts for the already well-off while simultaneously cutting back income support for those without work. The $300 per fortnight drop in the coronavirus supplement is ominous for what else may be in store. Indeed, at the economic update in July, the Treasurer noted that the pandemic had disproportionately impacted women. Yet to date, there has been no policy response to address this.
So what would a more equal and, in particular, more gender equal world look like? Collectively we can all see the pervasive list of hurdles to gender equality: unconscious bias, inherent resistance to change, gender stereotypes, imbalances of power, sexual harassment, government policies with no systematic gender sensitive policy, biased and inadequate parental leave, lack of accessible and affordable child care and early learning, work structures and processes built around traditional family unfriendly stereotypes; all contributing to our unequal society. So how do we work to change this? Should culture come first, or structural change?
We need a focus on both to improve both the economy and society for everyone. But it requires a redistribution - or sharing - of power, of economic opportunity and benefits and of the load of care. The budget can and should set the vision for this. Women's voices at the leadership table and women's workforce participation are needed for our economy now more than ever. These both require a sharing of care in the family home as well as a sharing of the cost of care between the family and society. As the late and inspirational Ruth Bader Ginsburg said, "Women will have achieved true equality when men share with them the responsibility of bringing up the next generation."
We need a focus on public policy that analyses and comprehends the differential impact of policy responses by gender. The stage 2 tax cuts - set to be a permanent cost to revenue of over $12 billion per year - are being mooted to be brought forward by a year to July 2021. These tax cuts have been shown by the Australia Institute to overwhelmingly benefit men, who are more represented in higher income brackets. Lower income earners will not benefit at all from these tax cuts. Not only is this highly iniquitous; as any student of economics will know, tax cuts, especially when focused on higher income earners, provide a more limited economic stimulus than the equivalent amount delivered as straight government expenditure. Why then would the government consider foregoing $12 billion in revenue, for a suboptimal policy outcome, that worsens inequality, particularly gender inequality?
Similarly, recent studies from the Grattan Institute show that focusing on investment in social infrastructure, such as boosting the childcare and aged care sectors, has significantly greater multiplier benefits for employment and national income. The analysis shows that for a $5 billion increase in public funding of childcare, allowing very low fees for low income earners and reduced fees across the income range, there would be an increase in GDP of more than $11 billion.
As the kids go off to bed on budget eve, we will await to see who has been favoured in the post-budget dawn and we will ask: how will this help our economy and our society to repair in a way that is fair, equitable and equal?
- Trish Bergin is co-director of the 50/50 by 2030 Foundation at the University of Canberra's Faculty of Business, Government and Law.