Australia is a prosperous country proudly founded on a ‘fair go for all’.
As with other developed economies, Australia must adapt and respond to the challenges and opportunities brought about by technological change, globalisation, demographic changes, including an ageing population and widening inequality.
A fairer, more prosperous Australia will deliver sustainable economic growth. Decent jobs and high living standards generate local consumer demand and productivity and are critical to boosting the economic prosperity of nations.
The 2016-17 Budget must focus on building a broad based economy; in quality private and public sector jobs, boosting our competitive advantages and investing in value-adding industries, innovation, new technologies and export opportunities.
Tax reform should focus on ensuring government has a sufficient revenue base to support a productive community; including universal access to health, education and welfare and to make the necessary investments for a strong, competitive economy for the future.
We urge the government not to continue to be driven by expenditure cuts and a spiral of under-investment in growth opportunities. Australia is already one of the lowest collectors of revenue and spenders on public services in the OECD. Austerity policies have failed both here and abroad as drivers of long term and sustainable growth.
Economic organisations including the World Bank, IMF and the OECD, have all recently noted that the increase in inequality in many economies in the last three decades, has had a negative effect on growth and prosperity.
Australia’s overall strong growth and employment record, matched with a strong social safety net, universal and high quality education and health care, an effective superannuation system, a decent minimum wage and employment standards has acted to slow the growth of income inequality experienced in countries such as the US and the UK.
However, inequality in Australia is now rising at a faster rate than most other countries and is a key threat to our economic growth and prosperity. Economic inequality in Australia extends far beyond the exclusion of disadvantaged Australians from the workforce. Since the mid-2000s workers wages have not kept up with overall economic growth. Cuts to critical services and support that form our social wage result in a further squeeze on low to middle income households, who are a crucial driver of growth, consumer demand and rising living standards.
We urge the government to produce a Budget that builds, not undermines the key foundation blocks of equality and decent living standards and invests in the skills, innovation and infrastructure necessary to secure our future prosperity.