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Australia's economic, social and environmental future

By Chris Lewis - posted Wednesday, 8 January 2020


Many Australians also struggle with living infrastructure costs, estimated to be around $314 per week for the average household consisting of $205 for car running costs, $45 for phone and internet costs, $41 for power and $23 for water.

Hence, while the median weekly gross household incomeincreased from $1607 in 2007-08 to $1701 in 2017-18 in real terms, higher housing costs alone help explain why the proportion of households with debt three or more times income increased from 23.4% in 2005-06 to 28.4% in 2017-18.

In addition, as the Australian Council of Social Service highlights, albeit the impact differs from person to person, many Australians struggle from stagnating wages, longer waiting lists for dental care, tougher eligibility through income tests for Family Tax Benefits, the tightening of the pension assets test and eligibility for the Disability Support Pension, and longer waits for older people with medical conditions for in-home care.

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With regard to immigration, while the Morrison government has pledged to reduce the cap on permanent migration from 190,000 to 160,000 after rising from 85,000 in 1996 to 208,000 in 2017, albeit short-term work visas and international students account for 700,000 per year in temporary migration, this level has placed an enormous strain on Australia's infrastructure needs, especially in Melbourne and Sydney where most visitors head.

While the Morrison government has announced a 10-year plan to invest $100 billion in infrastructure, Infrastructure Australia recently estimated that around $200 billion would need to be spent every five years on a range of infrastructure projects if it wants to keep pace with population growth.

Infrastructure Australia argued that such investment was needed to ensure adequate roads, public transport, schools, water, electricity and health services uphold Australia's quality of life and economic productivity. This investment was needed at a time when hospitals and schools are ageing or reaching capacity, parks and city green spaces were becoming overcrowded, and water pipes were ageing.

The debate over Australia's policy mix should and will be fierce. For example, while the Morrison government is committed to cutting income tax rates, with an individual on $200,000 from 2024 gaining most at $224 per week, others will argue that income tax cuts alone do not necessarily help the majority.

For example, it is noted that Donald Trump's 2017 income tax cuts have hardly helped most Americans. While savings has increased, inflation-adjusted wages for most American workers grew by just 1.6% From July 2018 to July 2019 compared to the 2.1% from December 2017 to December 2018, non-revolving consumer credit (mainly auto and student loans) by March 2019 remained at similar levels (18.6% of after-tax income) as it was in December 2017, economic growth had slowed since the middle of 2018, and the federal government deficit increased by almost $US2 trillion.

To conclude, it remains to be seen just how Australia's social and environmental policies evolve at time of unprecedented policy difficulties.

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For instance, while the Morrison government on 6 January 2020 announced an initial $2 billion Bushfire recovery fund over the next two years in response to Australia's current bushfire calamity, at time when $2 billion will be spent over the next decade through the Climate Solutions Fund to help reduce greenhouse gas emissions, such policy announcements may reflect the possibility that only the wealthy nations will have the resources to respond to emerging major environmental disasters.

As a student of politics that believes there are strengths and weaknesses in both the centre-left and centre-right perspective, however, reflective of the age-old reality that any decent and evolving social welfare system must also pay heed to competitive realities such as taxation rates and labour costs, Australia's policy mix will ultimately be decided by its people at the ballot box after public debate influenced by various interest groups.

I hope that Australian governments, both centre-left and centre-right, will ensure a fair distribution of resources due to public expectations/demands for a prosperous society and a better environmental future, albeit only a fool will downplay the reality of tough policy times ahead as Australia must rise above simple policy solutions in this competitive world.

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About the Author

Chris Lewis, who completed a First Class Honours degree and PhD (Commonwealth scholarship) at Monash University, has an interest in all economic, social and environmental issues, but believes that the struggle for the ‘right’ policy mix remains an elusive goal in such a complex and competitive world.

Other articles by this Author

All articles by Chris Lewis

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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