The recent/current ‘omnibus’ savings bill which aims to reduce Commonwealth spending by $6.3 billion over four years could be useful. It does reflect several major themes of our Unit, including: how significant is the bill in terms of Budget repair? Gi
- Category:Visual Arts & Film Studies
- Document type:Case Study
Budget Savings Omnibus Bill 2016
Debates on Budget Savings (Omnibus) Bill 2016 remain multifaceted as its reduction on Commonwealth spending as pegged at $6.3 billion remains unclear. From the one hand, scholars such as Malik (2016) have argued that the bill is a reflection of several other budgeting challenges in Australia, including but not limited to how well the bill can be with regard to repairing budget. Despite this position, there is need to reflect the challenges and position different organs of government have had in harmonizing the bill. Based on these viewpoints, this paper critically reflects on Budget Savings (Omnibus) Bill 2016 by ascertaining its prospects for further, and specifically, more meaningful spending cuts as it has been argued by its proponents.
From the viewpoint of $6.3 billion, Omnibus Bill 2016 remains political tactic. This bill, if traced from its onset, was a collection of different legislative changes that included some that has had regressive measures. The challenge is that Budget Savings (Omnibus) Bill 2016 represents a number of bills that were not allowed to pass the parliament for scrutiny. As it stands, Economics Legislation Committee was not given opportunity to ascertain the extent to which the proposal could help in budget repair. It is expected for instance, that with the bill aiming to save the country $6.3 billion in critical areas such as clean technology investment, it should be passed through Senate for evaluation to validate the extent to which it can repair budget and how it can affect lives of those directly involved with clean technology investment. As a matter of fact, Bainbridge (2016) reports that the Liberal Party got the support from Labor Party to deny economic experts to evaluate the extent to which the bill could help in budget reparations. In a nutshell, this bill remains political tactic as what was witnessed was one political party joining hands with another political party to create ‘savings’ that one cannot understand—basically it remains a dirty deal between the two political parties to cut funding with regard to Australian renewable energy investment. Instead of looking at this bill as ‘budget reparations’ it is actually a thing that has been intended to cut funding that used to support families or imposition of more debt on Australians renewable energy investment. Another way of looking at the challenge of this bill is in terms of research and development (R&D) incentives which are no longer in the hands of those implementing it but will be an agreement between the two political parties.
One aspect of this bill that need to be noted is that there is likelihood of around $1.6 billion by bringing to an end tax benefit A with regard to families over $80,000. Additionally, the Labor Party argument that they have saved ARENA when they decided to cut half a billion dollars may not make sense to any economist. As a matter of fact, the best way to put this point to common citizen is like meeting that surgeon who tells you that the operation was successful but the patient was lost. With regard to saviours of renewable energy, there is where Australians are as far as $6.3 billion, Omnibus Bill 2016 is concerned. Blanchard (2016) supports this position arguing that one cannot argue to be saving renewable energy investment and yet in the process take half a billion dollars out of the same. Australia saw Bill Shorten in the process of election campaign thus taking away about 50 percent renewable energy target.
The best way of understanding how significant the bill can be in terms of budget repair is the assessment of specific elements of the bill including consideration of the extent to which changes in the bill is warranted. To begin with is the half a billion dollar cuts with regard to Australian Renewable Energy Agency that has been proposed and the Labor Party has consented to. To any economist, Abbott government remains to be the only one for Australians to have taken away a price on pollution. Additionally, Australia remains to be the only country to have had a deal engineered by political pacts to put price on pollution but later on removing it, not to mention the reduction on renewable energy target. These undertakings cast doubts on the viability of Omnibus Bill 2016 when it comes to budget reparation. To conceptualise this point, economies were brought to the attention of Senator Xenophon and Senator Hinch who hinted that they were not going to support the bill as the bill was not going to do much when it comes to budget repairing. It is therefore not possible to argue that Budget Savings (Omnibus) Bill 2016 will help in repairing the budget to its expectations.
In addition to these uncertainties, the prospects for further and more meaningful spending cuts depend on the assessment of the bill beyond the argument of renewable energy by focusing on the aspect of family payments more so, cuts that concern family tax benefit A. As it is currently put, Australia will have a cut in in family tax benefit A when assessing households stretching over $80,000. While this is the point as argued in the bill, no technical advice from economist as none was allowed to scrutinize the bill to ascertain the extent of the tax benefit. Furthermore, Wilkinson (2016) adds that the process of bill did not allow the house or legislators the opportunity to investigate the extent of those cuts so that Australians could understand families who will be benefits and the exact impact the benefit will have on the families. From the one hand, economist would argue that the move aimed in the bill was a cut tax aimed at people earning hundreds of thousands of dollars and of course people will say that they have been spared the cut when it comes to the clean energy. On the other hand, the reality is that the bill is actually attacking some of the most vulnerable citizens in the country. If one looks at the youth payment cuts that currently remain before the parliament and the information that has come from Australia Counsel of Social Service (ACOSS) is that the process of allowing Budget Savings (Omnibus) Bill 2016 will only lead to cases of unemployment for the young persons. Stevens and Suzor (2016) put this point succinctly arguing that young people are likely to lose about $47 every week and being forced to wait for up to four weeks for their payments. One fact that cannot be ignored while assessing Budget Savings (Omnibus) Bill 2016 deeply is that currently, Australia is facing a number of challenges in the budget and that the main objective of this bill is to address some of the challenges that have been reported in the budget. However, there is no point in balancing the problems in the budget on the back of Australia’s most vulnerable citizens. It does not help when the country balances the budget on the back of cuts in cleaning energy when clearly there are other alternatives.
The government and opposition need to work with everyone for Australia to realize the needed innovations and a clear indication is about diesel fuel rebate. Instead of focusing on Budget Savings (Omnibus) Bill 2016, it would be better if one would eliminate the diesel fuel rebate and introduce fossil fuel industry. Better still, it would be better to replace the existing perks located to mining industry through accelerated depreciation then the country would likely save about $10 billion to help in addressing some of the challenges such as structural long-term problems within the country’s budget, thus there is no need of taking it out of pockets of Australians through Budget Savings (Omnibus) Bill 2016. In consequence, if the government would give a listening ear to mainstream economists they would have ended the distorting and inequitable effects that are likely to be brought by Budget Savings (Omnibus) Bill 2016, especially when one looks at the situation in terms of discount allowed and capital gains tax system which could allow Australia to raise billions of dollars. Just like Wilkinson (2016) has noted, government has an intention through Budget Savings Bill 2016 to abolish Medicare funded dental care for Australia children—which remains to be one of the achievements of Greens. Instead of focusing on Budget Savings Bill 2016 why should the government not deal with inefficient, inequitable and distorting private health insurance rebate and further reinvest the money into the public health systems. In so doing, the government will be addressing spending; in fact, this is the approach some countries have been using in addressing the issues of structural challenges within the budget.
Conclusively, this study aimed at assessing Budget Savings (Omnibus) Bill 2016 from different perspectives including the prospects of further solutions to the budget including meaningful spending cuts. Furthermore, the study has incorporated ways in which the bill’s reduction of Commonwealth spending by the suggested $6.3 billion over four years will be essential. This study finds that the piece of legislation (Omnibus) will make Australia less fair. It is likely to increase different structural inequality that Australia has known to be embedded within the country’s tax system.
Bainbridge, A., 2016. Why is labor even considering voting for the budget omnibus bill?. Green Left Weekly, (1110), p.8.
Blanchard, O., 2016. Rethinking Macro Policy: Progress or Confusion?. Progress and Confusion: The State of Macroeconomic Policy, p.287.
Malik, J.A.N., 2016. House bill seeks to secure energy critical elements. MRS Bulletin, 41(02), pp.91-92.
Stevens, J. and Suzor, N., 2016. Creative Commons Australia Response to the Productivity Commission Draft Report Intellectual Property Arrangements.
Wilkinson, G., 2016, June. The human rights (parliamentary security) act 2011 (Cth) and the increasingly visible intersections between the human right to health and intellectual property in Australia. In Intellectual Property Forum: journal of the Intellectual and Industrial Property Society of Australia and New Zealand (No. 105, p. 46). Intellectual and Industrial Property Society of Australia and New Zealand Inc.