With the Federal Budget delivered, Prime Minister Anthony Albanese has fired the starter’s gun for the federal election. If a week is a long time in politics, then the stretch between now and 3 May 2025 may feel like an eternity.
For many in the media, the Budget handed down by Treasurer Jim Chalmers on 25 March is now old news. Something to be filed away or forgotten, as journalists tune into the latest campaign announcement or salacious slip-up from among the hundreds of hopeful candidates. But to ignore the Budget statement is to misunderstand what it represents.
The Federal Budget is a political statement about the future intentions of a government wrapped in a veneer of numbers and assumptions. It is a statement which reflects a sense of direction and purpose, but framed within the constraints of a three-year election cycle. It was no surprise, then, that Chalmers’ fourth budget was delivered with an eye to the re-election of an Albanese government.
Themed as a ‘cost-of-living relief’ budget, it offered a raft of measures aimed at making life more affordable. This was no easy feat, given the challenge of easing pressure on households without triggering a sharp rise in the rate of inflation. So, Australians have been promised further energy bill relief, cheaper GP visits, a reduction in the maximum cost of PBS-listed medicines, cuts to student debts, increased childcare support, and, for those who like a beer, a freeze on draught beer excise indexation. The budget also included other measures, such as uplift in defence and industry spending. But the central message from the government was unmistakable: we hear your pain, and this is how we will help.
Most of these measures were announced well ahead of the Budget, but one was kept under wraps: proposed income tax cuts starting 1 July 2026. According to the Budget papers, a worker on average earnings will receive a tax cut of $268 in 2026–27 and $536 per year from 2027–28. These are modest cuts, but no doubt welcomed by families seeking relief from mounting costs.
And now for the bad news. The Budget is forecasting ten consecutive years of deficits, with net debt in 2025–26 expected to hit around $620 billion and climbing. The total interest payable on that debt — about $28 billion — is greater than the government’s spending on the Pharmaceutical Benefits Scheme, JobSeeker payments, family support, and disability pensions. While unemployment remains steady, projected economic growth is not strong; forecast to be about 2.25 per cent with inflation sitting around 3 per cent, though expected to return to the Reserve Bank’s 2–3 per cent target band in following years. Wages growth is forecast to grow slightly ahead of inflation in 2025–26, with expected incremental improvements over time.
This is a budget with many winners. But while it may help many, it’s difficult to describe it as a budget for the common good.
'This election, like the Budget, is being framed around cost-of-living pressures being faced by Australian households. But in reality, it is much more than that. It is really about whether our political and economic leaders are prepared to accept that our system needs to give preference to the poor and balance the interests of the powerful against those without power.'
The notion of the common good comes from Catholic social teaching. While the phrase may not be part of everyday political discourse, its spirit is embedded in Australia’s traditional values of fairness and equality, and sets out expectations of the state in upholding them.
In Catholic tradition, the common good is defined as “the sum total of social conditions which allow people, either as groups or as individuals, to reach their fulfilment more fully and more easily.” For the state to advance the common good, it must uphold the rights of individuals, arbitrate between competing interests to ensure all people have access to life’s necessities, and provide the stability and security of a just social order.
As important as the common good framework is, it cannot be fully realised if it doesn’t include actions which gives preference to the poor. As Pope Francis writes in Evangelii Gaudium, ‘Each individual Christian and every community is called to be an instrument of God for the liberation and promotion of the poor, and for enabling them to be fully a part of society.’
For the 970,000 Australians receiving JobSeeker and Youth Allowance, the cost-of-living pressures are acute. Stories of people skipping meals or avoiding GP visits to cover rent and bills are all too common. Many are living in poverty due to the inadequacy of current payments. The Government’s own Economic Inclusion Advisory Committee found, yet again, that these payments are too low and should be the top priority to enable economic inclusion. And yet this budget, like most budgets before it, continues to sideline those most in need.
Which begs the question: what is the Government’s priority towards those in need of liberation from poverty?
Despite its focus on cost-of-living relief, this Budget has not liberated people from poverty. But it would be disingenuous to suggest the blame lies solely on the current government. Apart from the temporary increase in welfare payments during COVID, measures under the previous Coalition government were for the most part even harsher for those on welfare.
Disappointingly, this year’s Budget has not properly arbitrated between the interests of those who control our economy and those who are subject to it, unable to secure access to the necessities of life. For a budget full of giveaways, this assessment might appear harsh. However, it falls short when assessed against the principles of the common good. The gap between what should have been delivered and what was delivered is stark.
The failure to address the inadequacy of the jobseeker payment is instructive of what is wrong with our political and economic system. It shows that above all else power matters. Those with power are protected, those without are ignored.
While this Budget contains substantial relief measures, many are in essence additional taxpayer-funded subsidies to businesses for specific goods and services. What successive governments, Labor and Coalition alike, continually fail to do is introduce measures which increase competition within critical sectors. Instead of using the market to drive prices down and importantly holding prices at a level which makes accessing goods and services more affordable for Australian households, it seems Governments are content to shift billions of dollars of subsidies directly and indirectly into the hands of corporations without any condition of reciprocity to reduce the cost of their goods and services.
As a general rule, government should not control prices, but they have a duty to ensure that there is a functional market, one where competition does much of the heavy lifting to control the prices of the goods and services households rely upon. Governments should be held accountable for that, and the fact that we have seen little meaningful outcomes from work in this space is both regrettable and costly.
We are now well underway in the election campaign and the Government’s recent announcement that they will look to outlaw price gouging in the supermarket sector is a welcome step. But as we know, the supermarket sector is not the only sector which should be subject to further scrutiny around prices: energy, insurance, finance and telecommunications also come to mind.
This election, like the Budget, is being framed around cost-of-living pressures being faced by Australian households. But in reality, it is much more than that. It is really about whether our political and economic leaders are prepared to accept that our system needs to give preference to the poor and balance the interests of the powerful against those without power. It is not an ideological battle between the left and right, capital versus labour, it runs much deeper. It is whether we believe in fairness and equality and a political and economic system that recognises and supports the common good.
Today we have the opportunity to ask for and demand better from our would be elected representatives. A focus on the common good is the first and most important ask of those seeking to secure government. If they choose to heed the calls for a fairer and better economy, then we can prosper as a nation, ignore it then the consequences will be dire.
Joe Zabar is the Chair of Mercy Works Ltd and a Visiting Fellow with the Tax and Transfer Policy Institute, ANU