Australia's COVID-19 public budgeting response: the straitjacket of neoliberalism - Emerald Insight
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Australia’s COVID-19 public Australia’s
COVID-19
budgeting response: public
budgeting
the straitjacket of neoliberalism
Jane Andrew and Max Baker
The University of Sydney Business School, Sydney, Australia
Received 6 July 2020
James Guthrie Revised 25 July 2020
Macquarie Business School, Macquarie University, Accepted 28 July 2020
North Ryde, Australia, and
Ann Martin-Sardesai
School of Business and Law, CQUniversity, Sydney, Australia
Abstract
Purpose – This paper explores how neoliberalism restrains the ability of governments to respond to crises
through budgetary action. It examines the immediate budgetary responses to the COVID-19 pandemic by the
Australian government and explores how the conditions created by prior neoliberal policies have limited these
responses.
Design/methodology/approach – A review and examination of the prior literature on public budgeting and
new public management are provided. The idea of a “neoliberal straitjacket” is used to frame the current
budgetary and economic situation in Australia.
Findings – The paper examines the chronology of Australia’s budgetary responses to the economic and health
crisis created by COVID-19. These responses have taken the form of tax breaks and a temporary payment
scheme for individuals made unemployed by the pandemic.
Practical implications – The insights gained from this paper may help with future policy developments and
promote future research on similar crises.
Originality/value – The analysis of Australia’s policies in dealing with the pandemic may offer insights for
other countries struggling to cope with the fiscal consequences of COVID-19.
Keywords Public budgets, COVID-19, Pandemic, Australia government, Neoliberalism, Fiscal
Paper type Research paper
1. Introduction
straitjacket (“strat-ja-kət”)
noun
(1) a garment made of strong material and designed to bind the arms, as of a violently
disoriented person.
(2) anything that severely confines, constricts, or hinders:
Conventional attitudes can be a straitjacket, preventing original thinking (Dictionary, 2020)
neoliberal straitjacket (“ne-o-li-b(ə-)rəl strat-ja-kət”):
noun
(1) the experience of social, economic and political confinement resulting from tax
minimisation, reductions in public services and other neoliberal policies.
Journal of Public Budgeting,
(2) the confinement of thinking in terms of government policy to that which is neoliberal Accounting & Financial
in origin. Management
© Emerald Publishing Limited
1096-3367
(Source: authors) DOI 10.1108/JPBAFM-07-2020-0096JPBAFM Over the last 40 years, neoliberal ideology in many countries has materialised as policies
and practices restricting the possibility of alternatives. Neoliberalism, described by
Friedman (2000, p. 102) as a “golden straitjacket”, has become the garment of choice for many
countries.
The dismantling of the Keynesian welfare state in favour of a narrow set of pro-business
political and economic policies has delivered uneven social and economic outcomes. While
these changes have taken time to spread across the globe, in numerous countries they are
accepted as mainstream (Samkin and Stainbank, 2016). However, as Ban (2016, p. 3) states
“neoliberalism is not a seamless and steely behemoth, but an evolving hybrid whose every
concrete manifestation is imbued with local flavours”. Australia has had its own experience of
neoliberalism and, as such, has sewn its own neoliberal straitjacket, made of a patchwork of
privatised public services and assets, deregulated markets, minimised taxation for
corporations and high wealth individuals and balanced national budgets (Larner, 2000).
As we finalise this paper, the political and economic reality of the COVID-19 pandemic is
yet to materialise fully, and there are growing concerns about how to manage its ongoing
financial implications. Given that this special issue of JPBAFM calls for papers exploring
COVID-19-related budgetary policies and the potential fiscal stress and consequences
(intended or otherwise) that may be created, our paper offers some insights from Australia.
While prior accounting research has explored budgetary frictions in Australia (Mir and
Rahaman, 2007; Sheehan, 2005), the budgeting and fiscal implications of the current COVID-
19 pandemic are unique. The pandemic has exposed the inadequacies of market-based
solutions, revealing that neoliberalism has become a straitjacket for Australia by limiting the
ways it can respond to force majeure events such as COVID-19. We offer a focused discussion
that extends prior work on budgeting.
Like other countries around the world, in response to the COVID-19 crisis, Australia has
taken unprecedented steps to manage public health and economic risks. Once the scale of the
crisis became apparent in late February 2020, the Australian government moved quickly. It
formed a National Cabinet, chaired by the Prime Minister and constituting premiers and chief
ministers from all Australian states and territories, to produce a coherent and consistent
national policy response to the pandemic. It formulated three primary directives as follows:
tighter border controls, boosting the capacity of the health system and enforced social
distancing measures to manage health risks.
There is little doubt that the situation remains precarious, and the trajectory of the
pandemic may change rapidly. The economic outcomes are also uncertain and unfolding. It is
becoming increasingly apparent that the consequences of this pandemic will be experienced
unequally in Australia (Andrew et al., 2020). We argue that, while temporary policy measures
have been operationalised to protect people from the immediate crisis in many countries,
without ongoing government support, many will soon face significant hardship. In Australia,
entrenched features of neoliberalism, such as growing inequality and uneven tax revenue,
have hamstrung the government’s ability to respond to the crisis. Across the globe,
governments are consumed by how to balance the competing imperatives of protecting
public health and ensuring the conditions for economic recovery. We hope that our
presentation of Australia’s policies will add to knowledge of how to deal with COVID-19 from
a budgetary perspective.
The paper has several sections. Section 2 provides an overview of the Australian
government’s neoliberal approach to accounting and public budgeting since the 1980s.
Section 3 outlines the Australian federal budget process. The current economic and fiscal
outlook for Australia and its two phases of crisis response are examined in Section 4, and in
Section 5 these are onceptualised as stimulating capital and protecting wages. Section 6
discusses how future welfare-oriented budgetary responses to the crisis may be limited by the
unequal conditions created by neoliberalism. Lastly, Section 7 draws together the paper’sinsights and argues for further research examining crises like COVID-19 in the context of Australia’s
neoliberalism. COVID-19
public
2. Neoliberalism in Australia budgeting
Many countries have adopted neoliberal ideas and reforms based on new public management
(NPM) policies and techniques, by imposing “quasi competition” and “business-like”
management models in the public sector. NPM is a logic steeped in the management
structures of the private business sector (Guthrie et al., 1990) and markets (Steccolini et al.,
2020) aimed at reducing the size of the public sector and reasserting political control (Guthrie
et al., 1998).
Within Australia, changes since the adoption of NPM reforms include the financial
management improvement programme in the 1980s, privatisation and formation of
government business enterprises in the 1990s and the contracting out of public services
early this century. Governments of both political persuasions have pursued NPM and
neoliberal ideas. Respective Australian governments have insisted on the corporatisation of
most formerly budget-dependent government organisations, the commercialisation of
publicly delivered services, the construction and delivery of goods and services through
public‒private partnerships, the selling-off of public sector assets and a reduction in income
taxes and government welfare expenditures (Broadbent and Guthrie, 1992; Guthrie
et al., 2005).
However, more recent economic events, such as the global financial crisis (GFC) in 2008
and subsequent sustained fiscal austerity, have more deeply entrenched these ideas in
Australia and elsewhere (Martin-Sardesai and Guthrie, 2020). The deregulation of the
Australian labour market has led to high levels of casualisation across all fields and an
increasingly unprotected contract-based labour force, resulting in greater household
inequality between waged and certain types of managerial work (Athanasopoulos and
Vahid, 2003; Tomaskovic-Devey et al., 2009). Despite reduced taxes and a retreat from the
delivery of public service, there is no evidence to suggest this has reduced the size of
government and government debt; instead, it has transferred the machinery of government
(Andrew and Cahill, 2017).
Under neoliberalism, the allocation of public resources has shifted away from principles of
equity and social justice to those based on the pursuit of efficiency, competition and costs in
the management of public services (Broadbent and Guthrie, 1992, 2008). This can be observed
across the Australian public sectors, where government activities have been corporatised or
privatised (Parker and Guthrie, 1993; Guthrie et al., 2005). For instance, Australia’s energy
supply, water, air transport, road tolls, airports, ports, health and social security have been
transformed according to NPM principles. Much of this transformation has been driven by
the advice of external consultants and the Big4 accounting firms, which champion the
competitive logics of markets as a driver of innovation and efficiency (Brooks, 2020).
Interdisciplinary accounting researchers have provided a sustained critique of the role of
accounting within neoliberalism (e.g. Andrew and Cahill, 2017; Zhang and Andrew, 2014), the
limitations of market-based solutions (Newberry and Brennan, 2013; Nikidehaghani et al.,
2019), and the transformations of public sector accounting that have dominated the last 40
years of reforms (Guthrie and Parker, 2011; Steccolini et al., 2020).
3. Background to Australian public budgeting
Currently, the Australian Federal Government budget sets out the economic and fiscal
outlook for the country. It includes expenditure and revenue estimates for the current
financial year, the budget year and three forward financial years. The budget also hasJPBAFM symbolic power as it maps the government’s social and political priorities and informs the
community about how the government intends to achieve these priorities (Budget, 2019).
Traditionally public sector budgets consist of two main parts. The first part outlines
financing and how revenue will be raised through taxation and various other charges. Over
the last 40 years, the Australian Federal Government has mobilised a range of revenue-
raising strategies including the introduction of a goods and services tax (GST), the sale of
public assets and the privatisation of statutory authorities and government business
enterprises. At the same time, there have been several cuts to personal income taxes and a
reduction in corporate taxation (from 49% in 1988 to 30% at present). The second part
focuses on expenditure that is relevant at the time of the budget, such as the cost of existing
and new public services. However, since neoliberalism has taken a grip on the budgeting
process, discussions of expenditure are generally focussed on commitments to reduce the size
and cost of the public service and increase its “productivity”. These discussions include
introducing new NPM initiatives that generate “efficiency dividends”, outsourcing essential
and non-essential services and restructuring and restriction of welfare provisions
(Cuganesan et al., 2014).
Unfortunately, the neoliberal re-orientation of public budgeting in Australia has prepared
the nation poorly for the current crisis. In 2020, the realities of the COVID-19 crisis remind us
that government-led policy and well-resourced public finance is critical to the viability of a
secure, healthy and productive society. It has also provided a graphic illustration of the
importance of sustained public ownership of core infrastructures such as health and
education and the vital role that well-funded social security plays in the well-being of all
citizens. During the COVID-19 pandemic, the nation has looked to government for support,
direction and resources to survive risks to life and livelihoods. In a matter of weeks,
Australians have witnessed a (perhaps temporary) retreat from market-based solutions to
those requiring an active and interventionist government and a well-resourced and
responsive public service. It seems that to survive both the health and the economic
consequences of COVID-19, Australians will need to unlearn neoliberal and ideological
assumptions about the role of government. We will need to re-think revenue raising and
recognise the value of public spending as this has so far proven our most significant
protection against the personal and social vulnerabilities produced by the crisis.
4. Government responses so far
A number of policy responses have emerged to tackle this crisis, giving us much to analyse
and critique. Here, we choose to discuss two budgetary phases mobilised by the Australian
government as part of its Coronavirus Economic Response Package Omnibus Bill 2020. In
short, the Federal Government’s initial efforts to stimulate the economy were undertaken
with a market-based neoliberal policy solution in mind. In this phase, businesses were
stimulated directly. However, the second phase, emerging slightly later, targeted individuals
and employment more directly. Specifically, as part of the second tranche of measures,
unemployment benefits were bolstered, and businesses affected by public health measures
were given a publicly funded wage for employees. The government has acted decisively in
the national interest to support households and businesses and address the significant
economic consequences of COVID-19. In describing and critiquing these approaches to
budgetary spending, the second phase represents a profound deviation from the political
rhetoric of the federal Liberal‒National Coalition government [1] and the neoliberalism that
has taken hold within Australian policy circles over the three decades regardless of the party
in power.
The central elements of the Australian federal government’s stimulus package are
presented here in the order in which they were announced (Treasury, 2020).4.1 Phase 1: beginning 12 March 2020 Australia’s
The instant asset write-off scheme has been extended with $700m allocated to enable COVID-19
businesses with a turnover of less than $500m to write off assets worth up to $150,000
instantly. This significantly expanded eligibility to the scheme from companies with a
public
turnover of less than $50m, and it lifted the write-off threshold considerably from $30,000. budgeting
In addition, the government introduced two cash payments of $750 to citizens currently
entitled to social security. These is a payment to people receiving welfare payments such as
the aged pension, unemployment benefits and the disability support pension amongst others.
4.2 Phase 2: beginning 22 March 2020
Australians facing hardship as a result of COVID-19 could access up to $20,000 of their
superannuation savings [2] early if they met specific criteria. Also, the Australian government
almost doubled the level of the JobSeeker (unemployment) payment to address the economic
fallout of the coronavirus pandemic.
In addition, a temporary wage subsidy payment scheme administered through businesses
and paid to employees to retain the employer/employee relationship, known as JobKeeper,
has been introduced. It consists of $1,500 paid per fortnight to businesses to subsidise the
wages of each eligible employee and targets employees who were working in companies that
have reduced revenue as a result of the public health measures.
By early June 2020, the Australian federal government had committed $320bn across the
forward estimates [3], which represents approximately 16.4% of GDP (Treasury, 2020). After
adjusting this downwards on account of a $60bn, accounting error associated with the
JobKeeper scheme, the overall commitment is $260bn, approximately half of the expected
total Commonwealth revenue for 2019–2020 (estimated to be $513.7bn).
5. Stimulating capital vs protecting wages
While it is too early to draw any meaningful assumptions about the relative success of these
budget initiatives, we can discuss the changing role of government in this time of crisis. This
includes the importance of public spending on public goods and welfare, our dependence on
public services as core drivers of economic and social activity (Bryant and Spies-Butcher,
2020) and the need for an internationally coordinated position on taxation and public revenue
raising. We will refer to the first phase as stimulating capital and the second phase as
protecting wages.
5.1 Phase 1: stimulating capital
Perhaps unsurprisingly, the Australian federal government’s first budgetary response to the
emerging health crisis drew directly from the neoliberal playbook. Announced on 12 March
2020, the first government stimulus package was focussed on stimulating businesses. It was
accompanied by lacklustre recycling of the successful cash payments policy mobilised by the
government in response to the GFC (Kennedy, 2009). However, in 2020 the two payments of
$750 to some welfare recipients was on a much smaller scale.
This initial response to the crisis was justified by the following logic. Public resources
directed towards businesses encourage business investment; this cash flow assistance also
helps small- and medium-sized entities and exposes sectors at risk of commercial failure. The
measures are designed to encourage businesses to continue with planned investment or to
bring forward investment “to support economic growth over the short term” (Prime Minister
of Australia, 2020a). Businesses were also offered a wage subsidy designed to cover 50% of
an apprentice’s wage for nine months in an effort to ensure viability in the face of revenue
downturns. Overall, about 75% of the initial package targeted businesses, with only 25%JPBAFM targeting households, and even those incentives favoured more secure companies that either
had cash reserves to invest to benefit from the write-offs or were confident of their capacity to
repay borrowings and reasonably sure of their future viability. Given that companies are less
likely to spend when their sales are falling, a package putting $3 in the hands of a business
spending $4 is consistent with a neoliberal model of government and does little, if anything, to
protect households and employees from the social and economic ravages of COVID-19.
For the most part, the first tranche of stimulus ignored the majority of wage earners
(Johnson, 2020), many of whom were employed in precarious casual or fixed-term contractual
arrangements as a result of the labour market transformation that has taken place in recent
decades. It also ignored the 2.17m people presently in Australia on a temporary visa (visitor
visa holders, international student visa holders, temporary skilled visa holders and working
holiday visa holders), who do not have access to unconditional work rights and government
payments. These temporary visa holders with work rights were allowed to access their
Australian superannuation to help support themselves during this crisis (Coleman, 2020).
These visa holders include more than a third of Australian workers who are not entitled to
paid leave, have no security and tenure and do not work fixed hours. At the time of the
stimulus package announcement, the scale of the health crisis was unknown, so it is not
surprising that initial government efforts to pandemic-proof the economy confirmed the
incumbent Liberal‒National Coalition’s historic allegiance to business and owners of capital.
These initial budgetary measures are examples of neoliberal economic thought that assume
“a larger share of income allocated to the top . . . relative to the rest of the income distribution,
causes economic growth” (Herzer and Vollmer, 2013, p. 505). They reflect “the seductive
appeal of neoliberal apparatuses”, an appeal so tightly woven into the logics of modern
governance that even in the most challenging of circumstances it appears “capable of
enrolling actors” (Chiapello, 2017, p. 60).
5.2 Phase 2: protecting wages
Before the COVID-19 crisis, there were approximately 13,015,200 employed people in
Australia (ABS, 2020a). Since the end of March 2020, over 50% of these are supported by two
government packages: JobSeeker and JobKeeper.
5.2.1 Increasing the JobSeeker payment. Once the scale of the pandemic started to become
apparent, in addition to closing the borders, the Australian government mandated a range of
social distancing measures during the last week of March 2020. These led to the temporary
closure of many organisations deemed non-essential, such as gyms, restaurants, pubs,
beauticians, universities, schools and sports clubs. Cultural and entertainment activities were
suspended, with the temporary closure of public spaces such as museums and libraries and
the prohibition of live performances and sporting events. As a direct result, over 2,000,000
became unemployed or underemployed overnight, and more lost their jobs over the weeks
that followed.
In recognising the limitations of a business-driven response to the crisis, the government
announced an increase to existing JobSeeker welfare payments on 23 March. JobSeeker is an
ongoing scheme aimed at supplying immediate financial protection to newly unemployed
people or those receiving other forms of unemployment and parenting payments. These
individuals were immediately eligible for a temporary supplement of $550 per fortnight. In
addition, the government waived the “means” test, which previously made people who owned
a particular value of assets ineligible.
Prior to the pandemic, there had been much public discussion about the poverty
experienced by welfare recipients. The introduction of the increased JobSeeker payment was,
in a way, an acknowledgement that previous social welfare payments of $650 a fortnight were
inadequate. However, like all of the stimulus measures, the total cost of JobSeeker dependsentirely on demand, with initial estimates suggesting it will cost $14.1bn over the forward Australia’s
estimates (Klapdor, 2020). In May 2020, the Australian Bureau of Statistics estimated there COVID-19
were 927,600 unemployed Australians (ABS, 2020b); in June 2020 the government said more
than 1.6m people were receiving JobSeeker (ABC News, 2020).
public
5.2.2 JobKeeper. Not long after the announcement of the JobSeeker package, the federal budgeting
Government announced the JobKeeper package on 30 March 2020, a wage subsidy worth
$1500 per fortnight for eligible workers. The cost of the package is estimated at $130b bn and,
unlike the JobSeeker payments, administered by businesses. It is an “historic wage subsidy”
open to “eligible businesses that received a significant financial hit caused by the
coronavirus” (Prime Minister of Australia, 2020b). In introducing JobKeeper, the government
aimed to make it possible for businesses to “hibernate” and to maintain an ongoing
relationship between company and employee until the company is viable again, reducing
unemployment. In effect, the subsidy is paid to businesses for all employees that meet the
threshold conditions, with every eligible employee receiving at least $1,500 per fortnight in
payments for the duration of the scheme. While JobKeeper maintains the bond between
employers and employees where it would have otherwise been severed due to COVID-19, it
also uses the business as the administrative mechanism to deliver the package. In doing so, it
symbolically elevates the role of business in tax-funded welfare support. Moreover, recipients
are required to pay income tax on the payment. At the time of writing, more than 6m people
across 860,000 businesses are receiving JobKeeper payments.
While the fiscal measures outlined above have been beneficial, they are also temporary.
How neoliberalism affects what happens in the long term is explored next.
6. The neoliberal straitjacket: inequality, taxation and Australia’s restricted
ability to respond to crises
COVID-19 exposes a double bind with neoliberal policies. The growing inequality that has
resulted from neoliberal policies has also significantly limited the government’s ability to
raise taxes. In what follows, we will refer to this double bind as the neoliberal straitjacket and
review how it has hamstrung the nation’s ability to use its budget to respond to force majeure
events like COVID-19.
As discussed above, the JobSeeker payment has exposed the inadequacy of the previous
social welfare payments of $650 a fortnight. Indeed, as a result of changes to the delivery of
unemployment and other benefits, welfare payments in Australia have been insufficient for a
long time. These payments have pushed people who are the most vulnerable below the
poverty line (Morris and Wilson, 2014); for example, a couple with two children experience a
shortfall of approximately $126 in covering the most basic living costs (Coady, 2017). The
economic situation is not much better for the employed. Real wages growth has steadily
declined from an average of 4% a year in the early 2000s to 2% in the 2010s (a period that saw
inflation at 2% a year) (ABS, 2020a). Wage stagnation has led to a greater stratification of
income in Australia with the top 1% earning an average weekly income 26 times that of the
lowest 5% ($11,682 vs. $436/week) (Alexander, 2020).
This rising inequality is exacerbated in times of recession and growing unemployment.
However, inequality is also fiscally problematic as, in theory, it reduces a government’s tax
base. While Australia’s income tax system is progressive, it has been getting less progressive
for decades (Elvery, 2018). Certain income-generating asset classes like superannuation
funds are taxed at a much lower rate, favouring more affluent (and older) Australians.
Likewise, neoliberal policies have also protected corporate income. While the official
corporate tax rate has remained constant at 30% from 2002, the actual tax raised on corporate
profits has decreased from 22.60% in 2007 to 18.50% in 2017. By way of comparison, from
2000 to 2018 revenue raised on income tax increased by 65% to $200bn, whereas tax revenueJPBAFM from business increased only 28% to $80bn. Despite the promises of “trickle-down”
economics, reducing the corporate tax bill has not increased the willingness of Australian
companies to pay taxes and higher wages or to employ more people.
Since COVID-19 there has been a growing emphasis on ‘budget repairs’, such as
increasing the consumption tax rate (the GST) (Kehoe, 2020), as well as taxing the capital
gains made on people’s principal place of residence (Duke, 2020). These new and regressive
tax policies burden working Australians whose wealth is predominantly tied up in their
home. Moreover, the government has avoided discussing the role corporate tax revenue could
and should play in a post-pandemic economy (Gocher, 2020). On the table for discussion
should be, amongst other things: the potential role wealth and inheritance taxes might play in
funding the stimulus; the importance of regulatory architecture that can prohibit the use of
tax havens; the need for a more fruitful public discussion of the role of taxes in the provision
of essential social services and welfare protections and the need for a wholesale reshaping of
the tax advisory industry (led by the Big4) away from a logic of aggressive minimisation and
towards one of mutual obligation.
At this stage, discussions of revenue-raising have been peripheral because of the urgency
of the crisis response. Where tax has been discussed, it has been in neoliberal terms. If
neoliberalism continues to dominate the debate, current and future wage earners will be
asked to bear the cost of the crisis. If that is the case, then we will see not a continuation of the
status quo ‒ not the often promised “trickle-down effect” of neoliberalism, but rather the
“pour-up effect”, where working families collectively fund government expenditures despite
having little individual capacity to do so. The response to the crisis has seen a shift in thinking
that may spark a much-needed conversation about revenue-raising and taxation. Hopefully
this conversation will involve us, as a community, seeking to uncover the contradictions
between the promise of neoliberalism and the reality of “actually existing neoliberalism”
(Cahill, 2007, 2010). Do we ask whether capital should be privileged and quarantined from the
burdens of tax? This is an especially pertinent line of inquiry considering that markets have
proven incapable of providing a solution during this crisis.
7. Conclusions
The current crisis has thrown the realities of neoliberalism into sharp relief. The tightening of
the neoliberal straitjacket over the last 40 years may finally be revealed for what it is.
Australia’s national budgets have been creating consistent winners and losers, where the
winners are large corporations and owners of capital and the losers are the self-employed,
contract workers, casuals employees and society as a whole because there is less money for
essential services and infrastructure such as hospitals, schools, welfare payments, science
and innovation and public transport. While COVID-19 has forced a temporary improvement
in welfare payments, the Australian government is currently working out how to manage
ongoing austerity measures (Duke, 2020; Kehoe, 2020). Coded phrases like the “need to make
tough decisions” (re-implement cuts to welfare) to “repair the budget” (re-balance the budget)
are being used by the same politicians who saw a retreat from these policies as essential only
a few months ago. Will these necessary repairs apply to glaring loopholes in company tax,
particularly for companies that sell digital products (Khadem, 2019)?
We must remember ‒ and remind our leaders ‒ that options do exist and can be pursued.
For instance, in 2017, the Australian Taxation Office, through the multinational anti-
avoidance law (MAAL) and the diverted profits tax (DPT), began clamping down (at least
temporarily) on tax avoidance by large global companies like Apple.
In the more immediate future, we may see the Australian public politically re-assess the
role of government budgets and even withdraw support for the current Morrison
government. However, we must be wary not to assume that such a political shift wouldalso represent an ideological shift. Instead, it is the responsibility of researchers to make a Australia’s
case for public budgets as a fiscal resource that should be mobilised to provide socially useful COVID-19
infrastructure, services, and safety nets, and this should always include the provision of
social goods to those in need. This is especially difficult when we know that the public debt to
public
emerge will be our shared burden. But the pandemic has reminded us of our co-dependence budgeting
and that a more robust society will require us to protect and support our most vulnerable
citizens.
To our minds, the crisis and public budget implications highlight the importance of
advancing knowledge that has the potential to contribute to our collective welfare. Despite
knowing the risk of global pandemics, and despite the availability of physical, monetary,
natural, human, relational, and structural assets to act and contain the COVID-19 outbreak,
many countries have been slow to respond (Dumay et al., 2020). Many people have
died, families have lost loved ones and economic systems teeter on the edge of collapse as
specific industries and supply chains grind to a halt. A variety of risks loom – some new,
some old – including financial crises, cyberterrorism, natural disasters and further
pandemics. Troublingly, these risks are amplified by several overarching trends as follows:
the intensification of inequality, the complexity of financial markets, the rise of digital
monopolies and, above all, the twin crises of climate change and biodiversity loss. Rather
than solve these problems, neoliberalism has increased their frequency and impacts. Until
we recognise that our local issues are now global in origin and stem from an unwillingness
to question neoliberal orthodoxy, we will remain constrained in its straitjacket.
Notes
1. Australian politics operates as a two-party system, with an ongoing coalition between the Liberal
Party and National Party. The Australian Labor Party (ALP) is a self-described social democratic
party, which in recent decades has pursued a neoliberal economic program. It was founded by the
Australian labour movement and broadly represents the urban working class, although it
increasingly has a base of sympathetic middle class support as well. In November 2010, the ALP
formed a minority government with the support of four independent cross-benchers. The Liberal
Party of Australia is a party of the centre-right broadly representing business, the suburban middle
classes and many rural people. Its coalition partner at national level is the National Party of
Australia, a conservative party representing rural interests.
2. Superannuation in Australia is a type of employment-funded pension, partly compulsory and further
encouraged by tax benefits. Employers must make superannuation contributions of 9.5% for their
employees on top of the employees’ wages and salaries. People are also encouraged to make
voluntary contributions, including diverting their wages or salary income into superannuation
contributions under so-called salary sacrifice arrangements (Superannuation Statistics, https://
www.superannuation.asn.au/policy).
3. In Australia, forward estimates are budget projections for revenue, expenses and financial position
for the three years beyond the current (budgeted) fiscal year.
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Corresponding author
Ann Martin-Sardesai can be contacted at: a.sardesai@cqu.edu.au
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