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Danielle Wood and Dr. John Hewson

Danielle Wood and Dr. John Hewson

2019 Budget: ‘The numbers are innovative’

18 April 2019

3 minutes read

Dr John Hewson and Danielle Wood joined in conversation after the 2019 budget was announced, discussing their interpretations and takeaways from the document. 

Dr Hewson spent more than 10 years in politics, leading the Liberal Party as Leader of the Opposition for four years. Since then, he has chaired and directed numerous organisations and foundations, such as charities and renewable energy companies, as well as run his own investment banking business.

Ms Wood has more than 15 years’ experience as an economist in government, consulting and the not-for-profit sector. She is currently the Budget Policy and Institutional Reform Program Director at the Grattan Institute where her research and advocacy efforts focus on tax and budget policy, inequality, competition policy and integrity reforms.

Both speakers agreed that the budget fell short of its potential and failed to address the current global economy and environmental risks.

Myopic view

Ms Wood noted that although the budget outlines a few areas of meaningful improvement, the proposed numbers for future spending lack a firm grounding in reality.

“They assume that growth turns back to historical trends and just sticks there for ten years, and they assume that there are no new spending measures whatsoever—as though the Government can contest another three elections without introducing a single new spending measure. So it is simply not a realistic picture of what the budget will look like. Nonetheless, that is what is underpinning most of the economic narrative in this budget,” said Ms Wood.

“If the Government was just using that as rhetorical flourish, we might just say we had a truth in advertising problem, but actually I think it’s led to a policy problem. The Government is using those medium-term numbers to say that its tax package in this budget is affordable.”

Political strategy

Dr Hewson was also cynical about the scope and robustness of the budget, calling its numbers ‘innovative’. He began his remarks with a sweeping look at the global economic state and pointed out how little of it seems to be accounted for in the budget.

“The world is slowing down, and it’s slowing down much faster than is being recognised in this document. The global constraints on our growth are not being recognised,” said Dr Hewson.

“You’ve got a Government whose back is to the wall—issues of disunity and disloyalty have dominated considerations for the standing Liberal party now for quite some time, and they’re trying to put together a strategy that would neutralise or at least capitalise on the positions of the ALP.” 

“I don’t think it’s effective as a political strategy. The Government is relying on the perception in polling that they are better economic managers, and they’re trying to build on that and paint themselves as reliable and Labour as a risk by comparison. We’ve had nearly 30 years of sustained economic growth with both parties in power. I think people discount the significance of economic management and today it’s taken for granted that whoever’s in power is going to be able to manage the place pretty well. So the idea of differentiating yourself on the basis of economic management may not carry the weight they think it’s going to carry.”

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Updated:   18 April 2019 / Responsible Officer:  CBE Communications and Outreach / Page Contact:  College Web Team