Budget 2016 Reply

"A nation's greatness is measured by how it treats its weakest members." - Mahatma Ghandi 

The value of a budget is measured by how it benefits the society as a whole - and how it supports its least powerful recipients.

While there are good and valuable initiatives within this budget - as a whole it fails to address many of the most important issues facing Australia right now.


Direct Effect on the Arts

None at all - except more of the same.

As far as the Arts are concerned, this is a "nothing" budget. No help, no return of funding, no improvement, no innovation. Nothing but further forecast cuts.

Nothing at all. Essentially no mention.

And this is what we, The Arts Party, have said all along. No matter how much the current government and other parties claim to have an interest in Innovation, Life-long Learning and Community Building for the betterment of Australian lives - the truth is there is nothing here.

It is a topic mentioned when expedient, and forgotten thereafter.

The scant references to "Recreation and Culture" that can be found in this budget are simply disappointing:
  • there are (previously announced) reductions to ABC and SBS funding amounting to a significant reduction (6.5%) of a budget that amounts to essentially nothing (0.05%) of the total spending budget of the government.
  • the reduction under the "national estate and parks" section of this budget are interesting, in that they are largely affected by a reduction in the Australian Antarctic Program - which represents a further reduction is this government's commitment to scientific research and a further reduction in Australia's support for innovation and development.

In the relevant summary section, this budget simply says that "Real growth 2016-17 to 2019-20" in the "Communications and the Arts" sector will be a reduction of 12.1% - from a budget that represents 0.1% of the total spending budget.

The total "Recreation and Culture" budget - which represents no more than 0.18% of the total budget, will be reduced by approximately 3.2%.

Yet another year goes by, with no real change - only further cuts. Another opportunity lost to usher in any real, significant or important reform.

What an amazing lack of foresight. What a terrible loss. How much could be done in this arena - if only some real energy; some real focus; some real money and some real ideas were put behind it?

Give us, The Arts Party, a chance, and we'll show you what can be done in this sector!


Response to Other Proposed Changes

While a 1% cut in company tax (for businesses up to $10m revenue) would be welcome under many other budgetary circumstances it does not appear to be the most efficient use of limited budget resources. Neither does it address the more pressing question of how to generate real innovation for the long-term future growth of our economy.

Marginal tax rate changes do not stimulate research and development - and marginal tax rate cuts for middle income earners do not directly stimulate the economy as much as raising minimum tax rate brackets.

The proposed measures to encourage start-ups and risk taking are welcome. These specific details have been on the cards for some time, and do not go far enough. We cannot hope to stimulate real cultural change in Australia's seed funding economy by generic business tax cuts and minimal changes to the way that business losses are calculated. We need to find specific and targeted solutions that directly reward research and development throughout the economy. The changes referred to in this budget speech are a blunt tool for a task that requires sharp, accurate and specific measures. 

The tax integrity measures proposed in the 2016 budget go part-way to improving the tax burden carried by multi-national companies. But they lack the depth of initiatives such as the Diverted Profits Tax implemented in the UK - and as such fail to truly reform the process of revenue collection from these bodies.

Measures to streamline business registration and improve options for sharing equity are aimed at encouraging people to monetise their ideas within the Australian economy, and are intended to encourage and support small business ventures within the economy. As such they are not a bad idea. But again they fail to tackle the question of how to reform our business culture; how to instil support for training, life-long learning and the revolutionary innovation that will power the developed economies of the world in the future.


Some Sad Details

The hidden truth is that many of the changes proposed by the last 2 Abbott budgets are still being implemented.

The NDIS is still being cut down to the point it that it won't work.

There is no money to implement Gonski. The funding measures for education are simply treading water, at best - and represent a continuing slide in Australia's ability to train and educate its children properly and prepare them for the future. Once we've convinced the government that teaching children to be creative and innovative is the way of the future, we then desperately need to do even more work to implement a "Life-Long Learning" strategy that recognises the need to help all Australians, young and old, to be continuously upgrading their skills and abilities to meet future needs. This budget doesn't even take the first step in that journey.

The National Gallery is to lose 8.5% of their staff. The National library loses 6.5%.

None of this is openly announced. None of it debated. The impact is not assessed or even vaguely considered.

What we need, right now, is parliamentarians with a mandate, from the people, to shed light on these issues, ask the relevant questions and to turn this ship around.


Summary

While measures to reduce tax for upper-middle Australians, and to tighten tax relief for high-income retirees are welcome, they neither go far enough, nor achieve anything more than basic enhancements - with the wrong focus.

Lucrative increases in revenue such as the "Google tax" and tobacco taxes simply don't go far enough - and ignore options that would make a far more significant difference to the future of Australians' lives, such as:
  • (careful, well-planned and responsible) changes to negative gearing
  • super-profits taxes for banks

Spending of those lucrative measures through blunt instruments such as bracket creep adjustments(1) and small-business tax cuts are neither innovative in their own right, nor increase innovation in the economy.

While it is not an Arts Party policy to chase a return to budget surplus at the expense of all else - it must be mentioned that the prediction of reducing the deficit to $6 billion, in the forward estimates, is based on predictions that are nothing short of purely optimistic

The stated aim of reaching a 25% company tax rate in 10 years, while laudable, is hopeful at best, and unlikely to be implemented under this (or any other) government. If it is found possible to do so in the next 10 years, it will take much braver, more innovative and more inspired policy decisions than those contained in this budget, to make it happen.

As such, the extension of the definition of "SME" to those companies with a revenue of up to $1 billion would seem to be nothing short of a cynical dog-whistle to the owners and beneficiaries of large businesses that "we haven't forgotten you" and "we will look after you" if you keep supporting us for re-election.

This budget fails to reduce government expenditure as a percentage of GDP while also failing to increase services or innovative spending in any meaningful way. It claims to err on the side of austerity (which is a questionable approach in the current climate, given international experience) while, at the same time, both failing to be austere and failing to increase or encourage investment in any meaningful way.


Furthermore, this budget fails to support, use or draw benefit from The Arts sector, the Creative Industries, the Education and Training sector - or to support Community and Lifestyle in any way, shape or form. In fact, it fails to mention them, or recognise the value they represent to every Australians' future, at all...


... as per usual.


For further details of the ideas we have already put forward (and for updates on our further policy details, as the election campaign kicks off) please see our policies page


  1. for the record, in The Arts Party's opinion, "bracket creep" should be avoided by pegging tax brackets to the Wage Price Index - thus removing it as a false crypto-tax-break, to be used whenever politically expedient.

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