Finally, a budget of economic reform. It has been too long coming. At this stage of the economic cycle, the budget should be in surplus. It should not be adding tens of billions of dollars every year to the mountain of public debt. Sixteen years after the release of the tax review commissioned by the Rudd government, our tax system should be supporting much better budget outcomes. It should be underwriting much stronger productivity growth. It should be delivering a much better deal for young Australian workers. And it should be delivering to Australians a much bigger share of the resource rents being extracted by the foreign multinationals exploiting our finite natural resources.
So, this budget doesn’t fix everything.
But make no mistake. Jim Chalmers’ budget takes a very big step. And it is a step in the right direction. This feels like a budget crafted with the same policy disciplines that drove the reforms of the 1980s and 1990s, reforms that set Australia up for an extended period of prosperity that was the envy of the world. On this, the treasurer should be congratulated.
The most important thing about this budget is its confirmation that economic reforms must not be left in the too-hard basket but must be pursued with a sense of urgency in the interests of future generations.
Delivering better outcomes for future generations is not all about budget bottom lines and tax settings. Buried beneath the headline numbers and the political commentary of the last few days is a set of reforms that deserve far more attention than they have received.
In December, the government, with the support of Sarah Hanson-Young and colleagues in the Senate, passed sweeping, consequential reforms to the Environment Protection and Biodiversity Conservation Act. As with many legislative achievements, there is often a gap between what parliament intends and what happens. Last night, the Treasurer allocated the resources necessary to close that gap.
The proposed investment in bioregional planning is a big deal. Australian governments have spent decades assessing environmental impacts one project at a time, in isolation, as if each were the first and the last. It is the most expensive and least effective way to make decisions about a landscape. And not surprisingly, the environment almost always pays the price. Bioregional plans can do the hard work up front, mapping where development can proceed, where it cannot, and where restoration investment will deliver the greatest return. They give industry the certainty it needs to invest. They give threatened species the connected habitat they need to recover. And they give communities a transparent basis for ensuring large-scale economic transformation, whether for renewables, mining or even carbon farming, will place the environment at the centre of decision-making, instead of an inconvenient afterthought.
Funding for Environment Information Australia matters just as much. Plans are only as good as the information underpinning them, and Australia’s biodiversity data has been chronically underfunded for decades. We have been making consequential decisions about irreplaceable landscapes using maps that are, in most cases, simply not good enough.
And by standing up a properly resourced national Environment Protection Agency, with genuine independence and enforcement capability, we will have an institution capable of holding governments and proponents to account.
These reforms are the building blocks that can transform how we protect and restore the environment in the midst of massive economic change, driven by the best information, conservation planning at the level that makes the most sense – regionally – and enforced by a powerful and independent regulator. It is just what our country needs.
The next step on this path, and one the government should now commit to, is the delivery of a fully functioning market for nature restoration. Until now, the EPBC offsets system has been about development compliance rather than the delivery of flourishing landscapes and wildlife. But it is now possible to see serious private capital flowing towards the recovery of soil, water, habitat and species. This would give our kids and grandkids a chance to see a bandicoot or potoroo in the wild. But it would also mean the continent they inherit has the ecological foundations to sustain lives and livelihoods for all Australians. This moves us away from years of useless piecemeal and desultory funding packages focused on PR and simply triaging the loss of nature, and towards investing in real restoration through shifting the responsibility for nature repair to precisely those industries that have caused the damage.
Australia has spent many decades writing cheques against accounts it does not own, taking from the “natural capital” of future generations and the fiscal resources of people not yet born. This budget does not clear the debt. But it makes a long overdue and highly credible first payment.
