Who'll most benefit from tax cuts? Rich men. We need gender-responsive budgeting, now

Who’ll most benefit from tax cuts? Rich men. We need gender-responsive budgeting, now

The tax cuts will “widen the already considerable economic divide between men and women”, according to The Australia Institute. It's a reminder, again, that budgets need a gender lens.
tax cuts

What do we want? A gender lens on the budget! When do we want it? Now!

I concede that this is not a particularly sexy feminist rallying cry, but it is the feminist rallying cry we need right now. Hear me out, and then go make your sign, T-shirt, mug, social media hashtag – whatever floats your boat. But get on it, before it’s too late. A lot is at stake.

In the latest act that is the ongoing drama of the Morrison Government’s “blokecovery” to the COVID-19-related “she-cession”, Treasurer Josh Frydenberg heavily hinted earlier this year that he was considering bringing forward already legislated Stage 2 tax cuts in the upcoming budget on October 6th in order to help stimulate the economy, now officially in recession.

“Tax cuts put more money in people’s pockets,” Frydenberg said.

The only problem with that claim is whose pockets are we talking about, men or women? Unfortunately, Frydenberg, nor anyone at the Treasury, it would seem, has really considered that question. And that’s a big problem.

On this occasion, that task fell to The Australia Institute, which today released a shocking report with modelling indicating that 70 percent of those benefits will flow to men, while only 30 percent will flow to women. Put differently, the tax cuts will deliver $2.28 of benefits to men for every dollar of benefits that flow to women.

You would think that a government that prides itself on its’ supposed superior economic management would spend some time diagnosing the actual problem it’s trying to solve with its much needed, precious, and finite economic stimulus.

And you would think that it would seek to get the biggest bang for each stimulus buck. Because, you know, that’s actually how you demonstrate good economic management? Don’t waste your stimulus bucks just because you can’t seem to break out of the old straight jacket of conventional, and simply outdated, thinking. Stimulus in 2020, in the midst of a “she-cession”, does not have to mean, nor should it mean, construction or infrastructure. Or tax cuts.

In the same report, The Australia Institute’s senior economist Matt Grudnoff said that the tax cuts would do little to stimulate the economy because the higher net worth individuals, mostly men, who would benefit from it would be more likely to save it.

The cuts would, however, according to Grudnoff, “widen the already considerable economic divide between men and women”. Yes, the COVID-19 recession is already doing a pretty efficient job of widening that gap, but you really do have to admire Mr. Frydenberg for wanting to do his bit to help. (Perhaps the Hippocratic Oath should also be applied to treasurers, but I digress.)

What’s more, previous modelling also by The Australia Institute, showed that investing in employment-intensive, female-dominated, and socially useful industries like healthcare, aged care and education would be more effective in stimulating the economy than bringing forward tax cuts, creating more jobs for every million dollars of stimulus spent.

Thanks for all that really useful gendered economic analysis Grudnoff and Co. Much appreciated.

Just wish someone else took the time, coughs, looking at you Treasurer Frydenberg, but I’ll get to that.

Now, I’m not an economist, but it does seem to me that such action might also address the gross undervaluing of women’s work, another unsexy, but vitally important feminist issue that I also recently hoped we had – at long last — found a T-shirt worthy slogan for. The slogan, for those interested in getting bulk value out of their T-shirt printing order, was “Essential AF”.

Now back to that pesky issue of gender responsive budgeting and why we need a so-called “gender lens” on the budget, now more than ever. And back to my deep irritation that, at this critical time, it is not Treasurer Frydenberg or anyone in the Morrison Government undertaking that task, but Matt Grudnoff of The Australia Institute and a band of 27 unpaid volunteers at the National Foundation for Australian Women who produce the annual “Gender Lens on the Budget”. (Yes, the irony of women doing unpaid work to produce a gendered analysis of the budget is not lost on me).

The thing is, between 1984 and 2014 when it was abolished by then Prime Minister Tony Abbott, the Treasury was legally obliged to provide a Women’s Budget Statement analysing annual budgets for their impacts on women and girls. Australia was the first country to introduce such a requirement when it came into force in 1984.

The budget remains the single most important policy document and it is near impossible to meaningfully address gender inequality without looking at it through the “lens” of gender. You just can’t do it. Exhibit A: today’s modelling from The Australia Institute.

Throughout the COVID health crisis, “listen to the experts” has become a popular refrain. But as recent events have demonstrated, we must also “listen” to the gender experts, and their gendered analysis.

In a recent piece for Foreign Affairs, philanthropist Melinda Gates said: “’Gender blind is not gender-neutral’ is a refrain among advocates for women and girls.”In this crucial moment, it must also be a call to action.”

“If policy makers ignore the ways that the disease and its’ impacts are affecting men and women differently, they will prolong the crisis and slow the recovery.”

Quite!

Now go get that T-shirt made. Suggestion: A gendered lens on the budget is also “Essential AF”.

Kristine Ziwica is a regular contributor. She tweets @KZiwica

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