John Warhurst | We are more than mere budget spectators

They are the outcomes of the year's political contests, a battle between various interests and parties.

They are a measure of the priorities of the government of the day.

They are the consequence of the best work of the public service departments, and the quality of the cases put by those in the community representing political causes.

Everyone admits the reality that budgets balance income and expenditure, given the availability of loans and tolerance for deficits.

Over the past few weeks, while a few have played a direct or indirect role in the construction of this budget, most of the community have been spectators.

As spectators we had our preferences, maybe even discussed them with friends, but generally we sat back as if we were watching a concert or a sporting event. We have enjoyed or been saddened by the spectacle while we speculated about the outcome. We may have trusted the Treasurer or dreaded the likely decisions. Now we know.

We examine budget outcomes while wearing different hats. It is not just that we each wear a different hat from other people, but that we each wear many hats at the same time.

We have a socioeconomic identity, a gender identity, a regional identity, an age identity, a professional identity, an ethnic identity and perhaps a faith identity.

These different identities may clash. If we are a young, single, middle-class, university-educated Catholic of Indian background, working in the public sector and living in the ACT these different aspects of our identity may pull us in different directions.

Whoever we are, however, while understanding the dynamics of a budget, we should not consider ourselves spectators but participants.

One way we can do this is to reflect on the efforts we made over the past year, beginning in the May 2022 federal election, and continuing throughout the year since, to play a more active role in shaping the budget. Many citizens have very good reasons - family, work, economic circumstances - why we can't give attention to the federal budget.

But even then, we may be letting ourselves off too lightly. The attitudes of each of us - towards national security, economic inequality, taxation, and the role of government - contribute to the shape of any budget. Together these attitudes make up the social context in which the budget is formulated.

The social context matters because, while each government has its own basic premises and predilections, all governments read the room in constructing a budget.

Each budget is something of a reflection of public opinion and community values. Are we more self-interested or altruistic? Are we willing to make sacrifices for others? Are we more individualistic or socially oriented?

Choices by government are made based not only on what senior cabinet members think, but on what they judge the wider community thinks - about the causes of poverty, the threats to Australian security, the needs of urban and rural Australians, the competing priorities between the disabled, the elderly and the young, for instance.

Choices are central to any budget and the most compelling interpretations of any budget by ordinary citizens, lobbyists or decision-makers are those which recognise and justify the choices that have been made.

We also must recognise choices which have been made in previous budgets that impact on the current one. This may mean debt or taxes or long-term expenditure commitments which cannot reasonably be reversed. Some things are set in stone; budgets don't start with a clean sheet.

There are different aspects of choice. The first involves revenue-raising and expenditure. Assuming some sort of balance is desirable between revenue and expenditure, all budgets have a choice between raising or lowering expenditure and/or revenue. Even then there is a lag before some new measures can reasonably be introduced. The community needs time to prepare itself for change.

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At this macro-level those who want to make the case to increase spending in some way earned most respect when they were also willing to contemplate increased taxes. In this round of budget preparation many advocates have done just that.

They have been willing to specify removing the already legislated stage three tax cuts as a means of providing space within the budget. Some were also willing to entertain new revenue from superannuation reforms, as the government had already signalled.

This made macro-level choices clearer. A test of these choices may come at the next federal election, not just between the government and the opposition but between the major parties and the Greens/independents.

There are also micro choices to be made, assuming general revenue/expenditure remains the same. These choices may be between defence and social welfare or between investment in infrastructure and immediate easing of cost-of-living pressures on individuals and families.

Advocates sometimes do address these choices, by preferring welfare payments over submarines or welfare payments over roads, rail-lines and/or football stadiums. This generates counter reaction from representatives of other interests; but at least it illuminates the choice.

The most difficult micro choices are made within government portfolios. This involves choices between tanks and planes or between JobKeeper and single parent benefits or between city and country road funding. But choices are still made.

All of us, whatever our position, age, or level of expertise should recognise that budgets are about choices. That is how we can participate in shaping them There is no excuse for being just idle spectators.