This is a very mixed Budget: it includes some good things, some bad things and a lot of missed opportunities. On the whole, it can probably be best understood by reference to the Treasurer’s statement that in the current environment, the government can’t even afford to fund good ideas.

Nevertheless, the Budget did include some positive measures. The changes to childcare are real economic reforms that will both reduce costs for families and provide an economic dividend for the future in the form of higher workforce participation. The expansion of paid parental leave is also a genuine reform.

Beyond these, however, claims of reform are more realistically steps in the right direction—and as anyone who has analysed Budgets over the years will attest, good first steps are rarely followed up with good second steps. Governments have a tendency to craft a narrative around a positive first step for a given Budget, and to then move on to a completely different story and another first step the following year.

The additional funding for TAFE is long overdue after decades of underinvestment in the sector. Hopefully the $900 million over four years is just a down payment on additional funding for the sector. There was also funding to put a registered nurse in all aged care facilities—but as the Royal Commission into Aged Care Quality and Safety has shown, much more is needed.

The one policy area that has received more token attention than any other in recent years has been housing affordability. The last of the major parties to propose meaningful reform in this area was the Labor party, before the 2019 election. Since then, both parties have only tinkered with the issue.

This Budget represents a continuing of this tinkering. The government has collected every possible house building scheme—not just at the federal level, but from the states, territories and the private sector—and put them all together to create an aspirational figure of an additional 1 million homes over five years from 2024.

This target is both absurd, in that the Federal Government is including houses with which it has no involvement, and largely irrelevant, since Australia built about 1.9 million homes over the last 10 years. Despite the headline-grabbing number, the Federal Government has really only committed to about 40,000 additional new homes, most of which won’t be built until after 2024. Meanwhile, genuine, meaningful reform in the housing market remains desperately needed.

So why has the government been so reluctant to do more in this Budget? Its hesitance can be attributed, at least in part, to both the inflationary economic environment and a desire to reduce the budget deficit. But both these factors just highlight the elephant in the room: the Morrison government’s planned stage 3 tax cuts. These will cos t$250 billion over 10 years. Why can’t the government afford further reform to aged care, health care, housing, and education? The answer is that it would prefer to give out a tax cut, about half of which will go to people earning more than $180,000.

To put the size of these tax cuts into context, the government has talked extensively about its crackdown on multinational tax evasion and the black economy. The initiatives to this effect in the current Budget are expected to collect an additional $3.7 billion over four years. Over those same four years, the stage 3 tax cuts will cost $38.5 billion—more than 10 times the money saved by the policies on tax evasion etc.

The Federal Government has also decided to not pursue a windfall profits tax on fossil fuels. The Australia Institute’s research has shown that the gas industry alone could enjoy windfall of up to $40 billion in 2021-22. This windfall hasn’t arrived because the gas industry has gotten better at extracting gas. It is due to higher prices, driven up by the war in Ukraine. A super profits tax could have brought in billions of dollars for the Budget. Instead, those dollars will depart Australia as profit to the mainly foreign owners of these international gas companies.

This Budget made important reforms to childcare and paid parental leave, but after years of neglect, much more reform is needed. Having now squared away its election promises with this Budget, hopefully the Albanese Government can focus on Australia’s most pressing needs.

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