While speaking to the aged care industry on Tuesday, John Hewson, also now a director of Crescent Wealth, commented that he was “very concerned” that the federal budget released last week was largely just a political document.
“It was an election budget on steroids,” Mr Hewson said, in an address to the Aged & Community Services Australia (ACSA) virtual conference.
“The way I’ve described it, they went out of their way to deal with all the issues, constituencies, marginal seats, that they would think would be important, coming into an early election. I still think that the possibility of an election late this year is realistic.”
The “big assumption behind the budget”, he added, was that the virus behaves and the vaccine is successfully rolled out.
As indicated in the budget papers, the government is aiming to have completed vaccinations across the Australian population by the end of the year. Since it began distribution in February, around 2.7 million people have been vaccinated.
International borders are also projected to open at some point in 2022, but the dates are not set in stone.
“These are big assumptions. And until that’s done effectively, we will remain pretty much a closed economic and social system to the rest of the world, which has its own consequences,” Mr Hewson said.
“And the economic performance will slow. The growth numbers have been strong, but they will be less strong as time goes on. Pretty easy to get a strong growth number when you come off such a deep base and you’ve got such big pent-up demand, but to sustain the recovery into the years and decades to come, is the real challenge.”
Mr Hewson also criticised a number of the government’s reforms on aged care, calling the budget a “start to responding to the aged care royal commission”, but lacking in long-term strategy.
The government had committed $17.7 billion to transforming the aged care system following the royal commission, with a further $13.2 billion being dedicated to the National Disability Insurance Scheme.
“Whether or not it’s going to be the basis of genuine reform over the next four or five years, that remains to be seen,” Mr Hewson said.
The issues the government needs to address in aged care range from home care and systemic processes to staff training and stagnant wages, he added.
On wages however, Australians are expected to see little growth for the coming years. Treasury has projected that wage growth will remain at a low 1.5 per cent for the 2021-22 financial year, before gradually rising to 2.5 per cent for the 2023-25 year.
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
