Australia's leading economists have picked help with school costs, rent and dental care as the most meaningful cost-of-living supports the federal government could offer.
A $600-a-year school essentials payment, a 40% increase in Commonwealth Rent Assistance and dental care under Medicare for concession card holders each led its category, chosen by seven of the 21 economists surveyed by the Economic Society of Australia's National Economic Panel.
The panellists were asked to choose one measure from each of three buckets – relatively low, medium and high cost to the budget – or to pick "do nothing".
They were also asked about the oil price shock. Most backed the government's decision to let the temporary fuel excise cut lapse on June 30: only four wanted it extended, and 13 ranked letting the excise return to its full rate among their top three responses.
In the low-cost bucket, the School Essentials Payment – $600 per child per year for families below median household income – led with seven votes. Six backed a minimum $2,000 standard tax deduction for all workers, removing the need for low and middle income earners to itemise work-related expenses.
In the medium-cost bucket, seven backed raising Commonwealth Rent Assistance by at least 40% and extending it to community housing tenants. Four chose a bigger, wage-indexed Family Tax Benefit Part A, and three chose free childcare in the year before school with a $10-a-day cap for younger children in lower-income households.
In the high-cost bucket, seven backed a capped universal dental scheme under Medicare for concession card holders, and six backed permanently indexing income tax thresholds to the Wage Price Index, ending bracket creep.
Several other options attracted almost no support. Not one of the 21 backed extending paid parental leave to 52 weeks. Only one backed a permanent halving of fuel excise. And only two picked mandatory grocery price reporting and a Supermarket Pricing Ombudsman with powers to investigate price gouging.
Macquarie University's Jeffrey Sheen said the government should address "the biggest unavoidable costs (rent, essential healthcare, childcare)" with "direct, predictable relief", make that support durable by indexing it to wages, and avoid "poorly targeted price cuts".
The University of Queensland's Alicia Rambaldi said helping households in the lower part of the income distribution with childcare, school expenses and a capped Medicare safety net would ease the cost of living now and "in the medium to longer term support human capital formation and labour productivity".
The Melbourne Institute's Beth Webster cautioned that payments should be kept simple, and preferably taxed as income rather than means-tested: "means testing can introduce distortions and have unintended consequences".
The University of Melbourne's John Freebairn instead wanted higher rates for means-tested unemployment, disability and age payments, funded by tightening income tax concessions and taxing large inheritances.
Others questioned whether the government should offer further relief at all. Seven of the 21 picked "do nothing" in at least one bucket – three in the low-cost bucket, six in the medium and three in the high.
Saul Eslake said any relief the government did provide "should be targeted to those who genuinely need it – unlike the electricity bill rebates of recent years". He warned that if the government overdid it, "the RBA may well 'take it away' in the form of higher interest rates".
The Australian National University's Robert Breunig raised the same risk. Given the inflation pressures already in the economy, further stimulus would "simply exacerbate those inflationary shocks". Any support should be small and tightly targeted, and measures that distort price signals "are particularly to be avoided".
Consulting economist Rana Roy picked "do nothing" in all three buckets, arguing the government needs to preserve its fiscal firepower – to "keep its powder dry" – until the global consequences of the conflict around the Strait of Hormuz become clearer. Locking in spending now could prove unnecessary if the crisis resolved quickly, he argued, while a global recession would require the government to preserve room for the response Treasury secretary Ken Henry urged in the global financial crisis: "go hard, go early, go households".
The ANU's Ben Phillips supported the school essentials payment but said the bigger problem was the approach itself: Australia should "focus less on short term, often poorly targeted 'cost of living' measures" and build a tax and transfer system that better cushions the economy's ups and downs and random shocks, rather than the current "ad hoc and piecemeal" response.
The University of Queensland's John Quiggin declined to pick at all, saying "cost of living" was "a meaningless term which economists should reject. What matters is real disposable income and the provision of public services."
The panel backed the decision to let the excise cut lapse on June 30.
Asked to rank their top three responses to the oil shock, their first preferences were tied: five chose letting the fuel excise return to its full rate – and letting petrol prices rise to market-clearing levels – and five chose accelerating front-loaded public investment in rail freight, public transit and electric vehicle infrastructure. Four chose a fully capitalised national Strategic Petroleum Reserve.
Across all rankings, 15 of the 21 put the investment option in their top three; 13 included the return to the full excise rate, and 13 the petroleum reserve. Only four included extending and deepening the cut.
Freebairn put the case for letting prices rise plainly: "Australia is a world price-taking petroleum importer. No one, including governments, can accurately forecast world fuel prices." Households and businesses should face the world price and respond to it, he said, and the excise – in effect a road user charge – should not be cut until a comprehensive charge covering electric vehicles is in place.
Roy said Australia's strategic reserve was the lowest of any International Energy Agency member and well short of the agency's 90-day minimum – "a shocking indictment of the irresponsibility of governments, past and present". His advice to the government: "just do it!"
But Eslake, who also ranked the reserve second, said he was "very wary of the risk of rent-seekers advancing their desire to put their snouts into the trough under the guise of enhancing some form of 'security' or 'sovereignty'".
Panellists including Rambaldi and Macquarie University's Lisa Magnani saw the shock as a reason to speed up the shift away from oil. Rambaldi said Australia's comparative advantage was not in oil production and refining: "we must invest in rail freight, public transit and EV infrastructure". Magnani said recent events had shifted the focus of the energy transition from climate to "security and independence", and Australia should treat high oil and gas prices "as an opportunity to move faster toward cleaner, cheaper energy alternatives".
Others preferred more immediate intervention. UNSW's Gigi Foster wanted the excise cut extended and deepened, arguing the government should take pressure off consumers and let its own budget absorb the squeeze, and described investment in nuclear energy as "a no-brainer" for resilience to global disruptions. Sheen ranked fuel rationing for non-essential uses first – in the short term, "keep essentials moving"; in the longer term, "reduce exposure to future shocks".
Not a single economist wanted the heavy vehicle road user charge exemption made permanent.
Former Department of the Prime Minister and Cabinet head Michael Keating said the right response depends on how long the shock lasts. The options are, in effect, insurance policies – and "how much we are prepared to spend on insurance depends upon our assessment of the risks to future fuel supply".
The message for the government, then: buy the insurance, skip the cheap petrol – and if it wants cost-of-living relief with real teeth, dental care would be a good place to start.
Isaac Gross, Monash University.
Responses (52)
Garry Barrett.
Low Cost
Introduce a School Essentials Payment of $600 per child per year for families below median household income.
Medium Cost
Raise Commonwealth Rent Assistance by at least 40% and extend eligibility to community housing tenants.
High Cost
Introduce a capped universal dental scheme under Medicare for all concession card holders.
Fuel Shock Priority
1) Fund a fully capitalised national Strategic Petroleum Reserve. 2) Allow the fuel excise to return to its full rate after June 30 and let prices rise to market-clearing levels. 3) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure.
Harry Bloch.
Low Cost
Introduce a School Essentials Payment of $600 per child per year for families below median household income.
Medium Cost
Raise Commonwealth Rent Assistance by at least 40% and extend eligibility to community housing tenants.
High Cost
Introduce a capped universal dental scheme under Medicare for all concession card holders.
Fuel Shock Priority
1) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure. 2) Extend and deepen the fuel excise cut beyond June 30, for as long as the oil shock persists. 3) Introduce fuel rationing for non-essential uses, prioritising diesel supply for freight, agriculture and essential services.
Alison Booth.
Low Cost
Legislate mandatory grocery price reporting and establish a Supermarket Pricing Ombudsman with powers to investigate price gouging.
Medium Cost
Increase Family Tax Benefit Part A and index it to wage growth rather than CPI.
High Cost
Introduce a capped universal dental scheme under Medicare for all concession card holders.
Fuel Shock Priority
1) Extend and deepen the fuel excise cut beyond June 30, for as long as the oil shock persists. 2) Fund a fully capitalised national Strategic Petroleum Reserve. 3) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure.
Robert Breunig.
Low Cost
Introduce a School Essentials Payment of $600 per child per year for families below median household income.
Medium Cost
Do nothing.
High Cost
Do nothing.
Comments
Given the substantial inflation pressures in the Australian economy, even without considering the current fuel shock, it is important for the government to avoid further stimulus which will simply exacerbate those inflationary shocks. Any stimulus should thus be small and very targeted at those who most need the help. Distorting price signals which can lead to useful behavioural changes are particularly to be avoided.
Fuel Shock Priority
1) Fast-track domestic oil and gas exploration approvals and sovereign production capacity. 2) Allow the fuel excise to return to its full rate after June 30 and let prices rise to market-clearing levels. 3) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure.
Ken Clements.
Low Cost
Introduce a minimum $2,000 standard tax deduction for all workers, eliminating the need to itemise work-related expenses for low and middle income earners index to CPI.
Medium Cost
Do nothing.
Fuel Shock Priority
1) Allow the fuel excise to return to its full rate after June 30 and let prices rise to market-clearing levels. 2) Allow the fuel excise to return to its full rate after June 30 and let prices rise to market-clearing levels. 3) Fast-track domestic oil and gas exploration approvals and sovereign production capacity.
Deborah Cobb-Clark.
Low Cost
Introduce a minimum $2,000 standard tax deduction for all workers, eliminating the need to itemise work-related expenses for low and middle income earners index to CPI.
Medium Cost
Raise Commonwealth Rent Assistance by at least 40% and extend eligibility to community housing tenants.
High Cost
Introduce a capped universal dental scheme under Medicare for all concession card holders.
Fuel Shock Priority
1) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure. 2) Fund a fully capitalised national Strategic Petroleum Reserve. 3) Introduce fuel rationing for non-essential uses, prioritising diesel supply for freight, agriculture and essential services.
Saul Eslake.
Low Cost
Do nothing
Medium Cost
Raise Commonwealth Rent Assistance by at least 40% and extend eligibility to community housing tenants.
High Cost
Comments
Additional Comments
Fuel Shock Priority
1) Allow the fuel excise to return to its full rate after June 30 and let prices rise to market-clearing levels. 2) Fund a fully capitalised national Strategic Petroleum Reserve. 3) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure.
Extra Comments
I am very wary of the risk of rent-seekers advancing their desire to put their snouts into the trough under the guise of enhancing some form of "security" or "sovereignty".
Gigi Foster.
Low Cost
Introduce a minimum $2,000 standard tax deduction for all workers, eliminating the need to itemise work-related expenses for low and middle income earners index to CPI.
Medium Cost
Make childcare free in the year before school and cap fees at $10 per day for children aged 0?4 in households earning under a certain cap (e.g., $120,000).
High Cost
Reduce the fuel excise by 50% permanently.
Comments
In each bucket we see a highly pre-selected subset of options. Hardly any option shown would reduce the interference of government in the economy. Instead of "pay for this" or "do nothing", there is an (unseen) option of "stop interfering in this". I've chosen the equivalent of "collect less money for the government" (and have a positive impact on cost of living) for the most epensive bucket in the form of the fuel excise tax amendment, which i hope may require the government to reduce its activities somewhat due to budget pressure. In the other two buckets i tried to choose progressive options, since poor people are feeling the pinch the most in the current crisis, but really i'd have preferred to have been able to select an option to deregulate or suspend other bureaucratic procedures that are slowing everything down and hampering competition, thereby hurting consumers.
Additional Choices
Yes. See above. Reducing the size of government would SAVE money.
Fuel Shock Priority
1) Extend and deepen the fuel excise cut beyond June 30, for as long as the oil shock persists. 2) Fast-track domestic oil and gas exploration approvals and sovereign production capacity. 3) Introduce fuel rationing for non-essential uses, prioritising diesel supply for freight, agriculture and essential services.
Additioinal Comments:
My third pick is an option only if things get really bad, and should only be implemented following public information campaigns to encourage fuel economy. Otherwise, taking pressure off of consumers while creating space in the pump price to accommodate the higher real cost of fuel and reducing government tax receipts, by weakening the fuel excise tax, is by far my preferred option. I also think we need to get real about energy and catalyse rather than denigrating the activities of companies interested in helping unearth and process Australia's significant domestic traditional energy reserves.
Further Comments: Investing in nuclear energy is a no-brainer for strengthning our immunity to such global disruptions, even though it would not pay off for years, but for some reason nuclear energy seems politically fraught.
John Freebairn.
Low Cost
Introduce a School Essentials Payment of $600 per child per year for families below median household income.
Medium Cost
Increase Family Tax Benefit Part A and index it to wage growth rather than CPI.
High Cost
Permanently index all personal income tax thresholds to the Wage Price Index.
Comments
Preference to increase payment rates for explicit means tested social security payments, including unemployed, disability and aged. For funds, tighten income tax concessions and consider introduction of a wealth tax on large inheritance and gift transfers.
Fuel Shock Priority
1) Allow the fuel excise to return to its full rate after June 30 and let prices rise to market-clearing levels. 2) Fast-track domestic oil and gas exploration approvals and sovereign production capacity. 3) Fund a fully capitalised national Strategic Petroleum Reserve.
Additional Comments
Australia is a world price-taking petroleum importer. No one, including governments, can accurately forecast world fuel prices. Businesses and households should accept world prices as the social opportunity price. So, leave the private sector to respond to uncertain and variable petroleum prices, both for consumption and for investment in domestic exploration and production. The fuel excise often is considered an indirect user charge for government provided investment in and maintenance of roads; so do not cut the excise rate until a more comprehensive road user charge to cover EV and petroleum vehicles is introduced.
Richard Holden.
Low Cost
Introduce a minimum $2,000 standard tax deduction for all workers, eliminating the need to itemise work-related expenses for low and middle income earners index to CPI.
Medium Cost
Do nothing.
High Cost.
Permanently index all personal income tax thresholds to the Wage Price Index.
Fuel Shock Priority
1) Fund a fully capitalised national Strategic Petroleum Reserve. 2) Fast-track domestic oil and gas exploration approvals and sovereign production capacity. 3) Allow the fuel excise to return to its full rate after June 30 and let prices rise to market-clearing levels.
Michael Keating.
Low Cost
Legislate mandatory grocery price reporting and establish a Supermarket Pricing Ombudsman with powers to investigate price gouging.
Medium Cost
Raise Commonwealth Rent Assistance by at least 40% and extend eligibility to community housing tenants.
High Cost
Permanently index all personal income tax thresholds to the Wage Price Index.
Fuel Shock Priority
1) Fund a fully capitalised national Strategic Petroleum Reserve. 2) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure. 3) Allow the fuel excise to return to its full rate after June 30 and let prices rise to market-clearing levels.
Additional Comments
The preferred option above depends significantly on how long it is expected the fuel crisis will last. If it can be expected to last a long time, then that will affect the preferred response. In effect we are being asked to take our insurance but how much we are prepared to spend on insurance depends upon our assessment of the risks to future fuel supply.
Geoffrey Kingston.
Low Cost
Do nothing.
Medium Cost
Do nothing.
High Cost
Permanently index all personal income tax thresholds to the Wage Price Index.
Fuel Shock Priority
1) Fast-track domestic oil and gas exploration approvals and sovereign production capacity. 2) Allow the fuel excise to return to its full rate after June 30 and let prices rise to market-clearing levels. 3) Fund a fully capitalised national Strategic Petroleum Reserve.
Elisabetta Magnani.
Low Cost
Introduce a School Essentials Payment of $600 per child per year for families below median household income.
Medium Cost
Raise Commonwealth Rent Assistance by at least 40% and extend eligibility to community housing tenants. 'Introduce a capped universal dental scheme under Medicare for all concession card holders.
Comments
The preference list above focuses on the most vulnerable groups in Australia. Many of these groups and families are disproportionately hit by the cost-of-living crisis we are facing. Support for families with children, for rent assistance and for basic health care go towards assisting these groups.
Measures such as raising rent assistance and extending eligibility to community housing go towards assisting the most vulnerable groups. However, the options provided did not include suggestions that were made in numerous occasions by advocates and researchers concerning these groups in Australia. These options include limiting rent increase, investing in community social services and raising other forms of income support (including Job Seeker, Youth Allowance, Parenting Payment among others). To help the poorest groups in Australia it is necessary to invest in public and community housing and appropriately fund homelessness services. To fund these policy initiatives, it is necessary to seriously consider the removal of tax cuts at the highest income levels and appropriately tax corporations and wealth.
Fuel Shock Priority
1) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure. 2) Introduce fuel rationing for non-essential uses, prioritising diesel supply for freight, agriculture and essential services. 3) Allow the fuel excise to return to its full rate after June 30 and let prices rise to market-clearing levels.
Additional Comments
Recent international events, including wars, have changed the energy focus from "energy transition for climate" to "energy transition for security and independence". Whether the long-term goals are climate, security or independence, any response to the current fuel cost crisis must avoid a divergence between short-run goals and long-term trajectories. The International Renewable Energy Agency supports the widely shared view that renewables are the most cost-competitive option for new electricity generation compared with other fossil fuel-based alternatives. Australia must take high oil and gas prices as an opportunity to move faster toward cleaner, cheaper energy alternatives. The above stated preferences avoid costly and dangerous gaps between short-run and long-run objectives.
In the face of the current fuel cost crisis, an option that is not included in the above list involves the introduction of robust fuel efficiency standards. Stricter fuel efficiency standards potentially bring significant savings and emissions reductions.
Margaret McKenzie.
Low Cost
Reduce the PBS general co-payment to $10.
Medium Cost
Make childcare free in the year before school and cap fees at $10 per day for children aged 0?4 in households earning under a certain cap (e.g., $120,000).
High Cost
Cap all out-of-pocket costs under Medicare at $1,000 per person per year (Medicare Safety Net reform).
Comments
The options offered are still modest and may not necessarily address the needs of those with lowest incomes, or income inequality; they don?t go far enough. The options seem to imply the old neoliberal chestnut that seeking small budgets and budget surpluses are good objectives. The Covid period at least should have shown that?s not the case.
Extra Comments
The options offered are pretty timid, reflecting the absence of initiative that seems to have characterised this government. We need: Fully fund medicare and dental; write off student debt; free public education at all levels. Raise jobseeker, no mutual obligations; Gonski; Increase resource taxes - sovereign wealth fund from export earnings; continue ir reforms back to previous, return to pattern bargaining, ir action legal outside bargaining period, etc.; stop working about the old chestnut of debt and deficits, and return some more privatised institutions to public ownership including childcare, ndis, so that govt isn?t subsidising private profits with little accountability.
Fuel Shock Priority
1) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure. 2) Allow the fuel excise to return to its full rate after June 30 and let prices rise to market-clearing levels. 3) Fund a fully capitalised national Strategic Petroleum Reserve.
Additional Comments
We could certainly focus on re building refining infrastructure, publicly owned. And a sovereign wealth fund from export earnings. Recognise our regional trade partners and work with them.
Extra Comments
Australia is uniquely positioned to minimize its dependence on oil and other nonrenewables. Now is the time for the government to kickstart a major big push on this including education for r&d and innovation, and in the area of waste minimisation and recycling. A factor in this is taxing the resources sector properly and full royalties. Out of a short term situation should come long term initiatives.
James Morley.
Low Cost
Introduce a minimum $2,000 standard tax deduction for all workers, eliminating the need to itemise work-related expenses for low and middle income earners index to CPI.
Medium Cost
Do nothing.
High Cost
Permanently index all personal income tax thresholds to the Wage Price Index.
Fuel Shock Priority
1) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure. 2) Allow the fuel excise to return to its full rate after June 30 and let prices rise to market-clearing levels. 3) Fast-track domestic oil and gas exploration approvals and sovereign production capacity.
Ben Phillips.
Low Cost
Introduce a School Essentials Payment of $600 per child per year for families below median household income.
Medium Cost
Increase Family Tax Benefit Part A and index it to wage growth rather than CPI.
High Cost
Introduce a capped universal dental scheme under Medicare for all concession card holders.
Comments
We need to focus less on short term, often poorly targeted ?cost of living? measures and focus more in developing a tax and transfer system that adequately addresses the ups and down of the economy and random shocks to the economy. Current approach is ad hoc and piecemeal.
Fuel Shock Priority
1) Extend and deepen the fuel excise cut beyond June 30, for as long as the oil shock persists. 2) Fund a fully capitalised national Strategic Petroleum Reserve. 3) Fast-track domestic oil and gas exploration approvals and sovereign production capacity.
John Quiggin.
Comments
"Cost of living" is a meaningless term which economists should reject. What matters is real disposable income and the provision of public services.
Fuel Shock Priority
2) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure. 3) Fast-track domestic oil and gas exploration approvals and sovereign production capacity.
Additional Comments
Only one of these does anything to assist transition away from oil. We should have been doing this years ago, instead of encouraging uptake of fuel-intensive SUVs etc.
Further Comments: The framing of questions in this survey, following the lines set out in mass media and political debate, is depressing. Economists should be offering a coherent policy analysis not responding to terms like "cost of living" and fuel shock
Alicia Rambaldi.
Low Cost
Introduce a School Essentials Payment of $600 per child per year for families below median household income.
Medium Cost
Make childcare free in the year before school and cap fees at $10 per day for children aged 0?4 in households earning under a certain cap (e.g., $120,000)
High Cost
Cap all out-of-pocket costs under Medicare at $1,000 per person per year (Medicare Safety Net reform).
Comments
Assisting households in the lower part of the income distribution with childcare, school expenses, and access to a capped Medicare safety net will impact cost of living and in the medium to longer term support human capital formation and labour productivity.
Additional Choices
Affordability of housing for households in the lower part of the income distribution should be a priority. There are a combination of measures to increase supply of housing that are currently being considered at all three levels of government. They should in the medium to longer term lead to increased supply and impact affordability. However, in the short term measures such as a targeted ?meaningful? increase to rental assistance should also be put in place.
Fuel Shock Priority
1) Extend and deepen the fuel excise cut beyond June 30, for as long as the oil shock persists. 2) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure. 3) Fund a fully capitalised national Strategic Petroleum Reserve.
Additional Comments:
The current middle east conflict and associated oil shock has shown we should consider seriously how to minimise the risks to our economy from such events. Assisting and prioritising supply for freight, agriculture and essential services as well as cutting fuel excise are measures that should be implemented as necessary until the current shock persists. However, this is an opportunity to consider our comparative advantages, which are not in domestic oil production and refining. We must invest in rail freight, public transit and EV infrastructure.
Rana Roy.
Low Cost
Do nothing.
Medium Cost
Do nothing.
High Cost
Do nothing.
Comments
My vote for ?Do Nothing? is based on a simple proposition: the Australian Government needs fully to preserve its fiscal freedom of action ? to ?keep its powder dry? ? until the global economic outcome of the current US-Iranian ?dual blockade? around the Strait of Hormuz becomes clearer. If the words of the American thinker Donald Rumsfeld may serve duty, then, as at today, the end of April 2026, there are simply too many ?unknown unknowns? to rely on any estimates of the calculable risks of the ?known knowns? and the ?known unknowns?. But what can be said with confidence is that the range of possible scenarios is very wide.
Comments
As indicated above: if the outcome of the current US-Iranian conflict were to prove to be a global recession, then the Australian Government might well need to adopt the Henryian fiscal formula of yesteryear: ?go hard, go early, go households?.
Fuel Shock Priority
1) Fund a fully capitalised national Strategic Petroleum Reserve. 2) Fast-track domestic oil and gas exploration approvals and sovereign production capacity. 3) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure.
Extra Comments
Given the argument set out above in my Comments on Part 1, my criterion for selecting amongst the options named in Part 2 is this: prioritise those options which can be justified independently of any assumptions and forecasts made today regarding the level of global traded oil prices and hence the pre-tax price of fuels available to Australia as at the end of June, or the end of 2026, or thereafter.
Additional Comments
The first priority ? the most obvious and most immediate priority ? is to fund a fully capitalised national Strategic Petroleum Reserve. The fact that Australia has the lowest strategic petroleum reserve of any member-country of the International Energy Agency, far lower than countries far less rich than us, is a shocking indictment of the irresponsibility of governments, past and present. Equally shocking is the fact that so many in the ?expert community?, who regularly urge compliance with international rules and norms and wish-lists when these coincide with the preferences of the said experts, seem perfectly comfortable with Australia thumbing its nose at the IEA?s requirement for a minimum 90-day reserve. There is no need for further commentary on this point. The only advice that one can offer the present Government is this: just do it!
The second priority ? and one which ought not to be controversial if the wording above is to be taken literally ? is to ?fast-track? domestic exploration approvals. As should be clear from my earlier comments, I think that there are indeed occasions in which the correct course is to ?do nothing?. But I have difficulty with the idea that the default position in government should be anything other than to ?fast-track? the relevant processes ? for example, to ?slow-track? them deliberately through needless ?red tape?. In this particular instance, ?fast-tracking? domestic exploration approvals ? as opposed to subsidising such exploration ? is surely a relatively cost-free way for Australia to seek a potential route to maximising its energy security and thereby its national security.
The most compelling counter-argument ? namely, the environmental case for prioritising the transition out of fossil fuels ? is one that does not apply in this instance. Australia has chosen to derive its prosperity from fossil fuel exports, exports of coal and natural gas, and also from exports of iron ore to a still coal-dependent Chinese economy. In view of this, its reticence in regard to oil exploration approvals does not make much sense. The option I have chosen as my third priority ? though its long-term social return is likely to prove to be the highest ? is to ?accelerate front-loaded public investment in rail freight, public transit and EV infrastructure?. The case for public investment in rail freight, public transit and EV infrastructure need not and does not depend on any particular level of fuel prices. Rather, I would make this case ? and have done so repeatedly over many years to international government agencies and to local and national governments around the world ? on the basis of the quantifiable benefits of reductions in accidents, congestion, air pollutant emissions and CO2 emissions resulting from such investments relative to the cost of the investment itself. But it is of course also true that the quantifiable benefits from fuel savings will be a higher in a world of higher fuel prices. The case for accelerating such public investment in Australia and at this time need not and does not depend on any particular level of fuel prices. Rather, I would make this case on the basis of the record of past and continuing under-investment in Australia. And this under-investment is no accident: Australian governments have long under-estimated the Net Present Value of such projects by virtue of using an excessively high discount rate ? that is to say, by virtue of discounting the future too aggressively. Now is as good a time as any for Australia to accelerate investment in rail freight, public transit, EV infrastructure, and other related measures to achieve modal shifts and increasing electrification in freight and passenger transport; now is as good a time as any to begin catching up in this particular regard with OECD Europe, OECD Asia, and indeed much of emerging and developing Asia. The point, however, is that these are long-term investments, yielding long-term returns; they are, by their nature, of limited use as a response to the effects of the present crisis around the Strait of Hormuz.
Extra Comments: As noted above: it is possible that we will find ourselves in something of an economic emergency before long, with a continuing dual blockade around the Strait of Hormuz, resulting in a reduced global supply of oil trading at very high prices, resulting in a deep global recession. In this emergency scenario, governments around the world including the Australian Government might well need to consider emergency measures regarding the distribution of fuel ? that is, as described in the list of options, ?fuel rationing for non-essential uses, prioritising diesel supply for freight, agriculture and essential services?.
Jeffrey Sheen.
Low Cost
Further Comments
Reduce the PBS general co-payment to $25.
Medium Cost
Raise Commonwealth Rent Assistance by at least 40% and extend eligibility to community housing tenants.
High Cost
Permanently index all personal income tax thresholds to the Wage Price Index.
Comments
Pick supports that address the biggest unavoidable costs (rent, essential healthcare, childcare) with direct, predictable relief. Make them durable and fair by indexing to wages. Keep access simple, and avoid poorly targeted price cuts.
Additional Choices
Introduce a universal Medicare dental scheme for concession card holders with low or zero co-payments and annual caps that are high enough to cover real care, prioritising preventive visits plus urgent treatment. Use government borrowing for short-term emergency relief and investments that save money long-term, but fund permanent spending or tax cuts with permanent revenue, and design supports to automatically end as conditions improve.
Fuel Shock Priority
1) Introduce fuel rationing for non-essential uses, prioritising diesel supply for freight, agriculture and essential services. 2) Fund a fully capitalised national Strategic Petroleum Reserve. 3) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure.
In the short term, keep essentials moving. In the longer term, reduce exposure to future shocks.
Targeted fuel supports (eg time?limited vouchers/cash for low?income and essential users, extra help for remote/regional areas),
Beth Webster.
Low Cost
Introduce a minimum $2,000 standard tax deduction for all workers, eliminating the need to itemise work-related expenses for low and middle income earners index to CPI.Raise Commonwealth Rent Assistance by at least 40% and extend eligibility to community housing tenants.
Medium Cost
Increase Family Tax Benefit Part A and index it to wage growth rather than CPI.
High Cost
Introduce a capped universal dental scheme under Medicare for all concession card holders.
Comments
Need to keep payments simple and preferably taxed (as part of income tax) rather than means tested. Means testing can introduce distortions and have unintended consquences.
Fuel Shock Priority
1) Raise the tax-free income threshold (but not necessarily the other thresholds). 2) Allow the fuel excise to return to its full rate after June 30 and let prices rise to market-clearing levels. 3) Accelerate front-loaded public investment in rail freight, public transit and EV infrastructure
Additional Comments
Accelerate power cables and infrastucture to make renewables a better alternative to coal.