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  • Commonwealth Budget 2025-2026: Our analysis

    Commonwealth Budget 2025-2026: Our analysis

    by Fiona Macdonald

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    The Centre for Future Work’s research team has analysed the Commonwealth Government’s budget, focusing on key areas for workers, working lives, and labour markets.

    As expected with a Federal election looming, the budget is not a horror one of austerity. However, the 2025-2026 budget is characterised by the absence of any significant initiatives.
    There is very little in this budget that is new, other than some surprise tax cuts, which are welcome given they mostly benefit people on low incomes

    There are continuing investments in some key areas supporting wages growth where it is solely needed and for rebuilding important areas of public good. However, there remains much that needs to be done in the next parliament, whoever is in government.

    “The budget does deliver a welcome tax cut targeted towards those on low incomes” Chief Economist Greg Jericho notes, “but the lack of new spending and initiatives highlights the need for policies from all political parties in the coming election campaign that address inequality and the needs of people who have been most hurt by cost of living rises over the past three years.”

    Read our full budget briefing paper for more information


    Related research



    Budget briefing paper 2025-2026



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    Dutton’s nuclear push will cost renewable jobs

    by Charlie Joyce

    Dutton’s nuclear push will cost renewable jobs As Australia’s federal election campaign has finally begun, opposition leader Peter Dutton’s proposal to spend hundreds of billions in public money to build seven nuclear power plants across the country has been carefully scrutinized. The technological unfeasibility, staggering cost, and scant detail of the Coalition’s nuclear proposal have

  • Budget briefing paper 2025-2026

    Education & Training, Gender at Work, Industry & Sector Policies, Macroeconomics, Social Security & Welfare, Tax, Spending & the Budget, Wages & Entitlements

    Budget briefing paper 2025-2026

    by Greg Jericho, Charlie Joyce, Lisa Heap and Fiona Macdonald

    Authors

    Greg Jericho

    Chief Economist

    Charlie Joyce

    Researcher

    Lisa Heap

    Senior Researcher

    Fiona Macdonald

    Acting Director, Centre for Future Work

    The Centre for Future Work’s research team has analysed the Commonwealth Government’s budget.

    As expected with a Federal election looming, the budget is not a horror one of austerity. However, the 2025-2026 budget is characterised by the absence of any significant initiatives.  There is very little in this budget that is new other than the surprise tax cuts, which are welcome given they benefit mostly those on low-incomes. There are continuing investments in some key areas supporting wages growth, where it is sorely needed, and rebuilding important areas of public good. However, there remains much that needs to be done in the next parliament.

    This briefing paper reviews some of the main features of the budget, focusing on those aspects targeting and impacting on workers, working lives and labour markets.

    The establishment of a $1 billion Green Iron Investment Fund to provide capital grants to green iron projects is a significant investment. With $500 million of this fund going to the troubled Whyalla steelworks this investment should ensure ongoing integrity in the management of this vital industrial asset. We believe the government should take a significant ongoing stake in the ownership of the Whyalla steelworks. The $2 billion Green Aluminium Production Credit, to incentivise Australian aluminium smelters to switch to renewable electricity before 2036, is a necessary and welcome policy to assist the transition to a low emissions economy. Unfortunately, the credit is not available until 2028-2029.

    New and ongoing support for students in TAFE and in higher education are important cost-of-living measures while also making education and training more inclusive and accessible. There is some new funding for previously announced initiatives that support workers and wages growth and some funding for new wage increases in the female-dominated, and low-paid, aged care and early childhood education and care sectors; demonstrating the government’s commitment to addressing long-standing undervaluation of feminised care occupations. Continuing government support will be needed as the current Fair Work Commission review of awards to address undervaluation progresses.

    Other reforms in ECEC, along with previously announced changes to paid parental leave and carer payments, provide welcome, but belated, support for working parents and carers. It is disappointing to see that the opportunity has been missed to raise Job Seeker and Youth Allowances from their grossly inadequate levels.



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  • Briefing Paper: Restoring public sector capability through investment in public service employees

    Employment & Unemployment, Future of Work, Gender at Work, Governance & Government Agencies, Labour Standards & Workers’ Rights, Public Sector, Procurement & Privatisation

    Briefing Paper: Restoring public sector capability through investment in public service employees

    by Lisa Heap

    Author

    Lisa Heap

    Senior Researcher

    The Australian Public Service (APS) is responsible for delivering some of the most crucial social services to all Australians. The APS workforce includes employees who deliver frontline services like in Medicare and Centrelink, those who administer the National Disability Insurance Scheme (NDIS), and those who assist service personnel and veterans via Veterans Affairs. These are just some of the functions that APS employees undertake. Behind front line service delivery staff are employees who support these staff, work to coordinate and integrate services and provide policy and regulatory advice to government.

    This briefing paper examines the make-up of the APS and considers recent efforts to improve APS service delivery. We conclude that recent investment in the employment of more APS employees has improved service delivery and that any reduction in APS employees will reduce service delivery or result in the engagement of more consultants and contractors.

    In this paper we debunk several of the myths promoted in the political debate around the size of Australia’s public service. One such myth is that Australia’s public service is “bloated” or “inefficient”. The research also found that despite claims to the contrary, most of the public service jobs created since 2022 were not based in Canberra.



    Restoring public sector capability through investment in public service employees

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  • Climate crisis escalates cost-of-living pressures

    Climate Change

    Climate crisis escalates cost-of-living pressures

    How climate change inaction drove up the cost-of-living
    by Jack Thrower

    Author

    Jack Thrower

    Senior Economist

    Media release



    Climate crisis escalates cost-of-living pressures

    Important components of the cost-of-living crisis are a direct result of the climate crisis.

    Failure by policy makers to factor in the impacts of climate change on the cost of living, will limit the government’s ability to address it. Each year we fail to mitigate emissions is another year we bake in cost-of-living pressure in the future.

    Key among these price impacts are the cost of insurance, food and energy. Collectively, food and insurance account for more than a fifth of the consumer price inflation Australia has experienced since 2022.

    Insurance – As the climate has destabilised, the increase in natural disasters has led to an increase in payouts for insurance companies and an increase in premiums for homeowners.

    One in 20 Australian households now pay more than seven weeks of gross income on home insurance. In other words, these households work from New Year’s Day to late February, just to pay their home insurance.

    Increases in insurance premiums have hit certain regional areas particularly hard, where average household incomes are lower than urban areas while premiums are higher.

    The price of insurance in many areas of Australia have already become prohibitively expensive. As continued global heating and more frequent disasters make these problems worse, whole suburbs or towns will become uninsurable.

    Food – Food prices have soared by about 20% since 2020. The planet’s changed weather patterns have impacted food production and, in some areas, permanently affected a region’s ability to grow particular crops. Climate impacts mean that even if Coles and Woolworths stop price gouging, food prices will keep rising.

    Energy – Australia’s energy system is complex. Underinvestment in the transition to renewables and tying ourselves to international pricing mechanisms by exporting fossil fuels has resulted in high local electricity prices for Australian households. Even if we were to decouple ourselves from this, energy prices would continue to be impacted as more climate disasters damage vital public infrastructure.



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    Climate crisis escalates cost-of-living pressures

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  • Climate crisis escalates cost-of-living pressures

    Climate crisis escalates cost-of-living pressures

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    A new report has found direct connections between the climate crisis and rising cost-of-living pressures. Failure to lower emissions now will only aggravate the crisis, with each moment of inaction compounding the pressure on households.

    The report identifies three key areas where the climate crisis is directly driving up costs for Australians: insurance, food, and energy.

    These sectors combined have accounted for over a fifth of the consumer price inflation experienced in Australia since 2022.

    Key findings:

    • Insurance premiums have soared due to an increase in natural disasters, with some households now spending over seven weeks of gross income just to cover home insurance
    • Food prices have risen by 20% since 2020, with climate-related disruptions wiping out harvests and making it harder for some regions to grow food
    • Energy costs remain high due to a reliance on fossil fuels, underinvestment in renewables, and fossil fuel exports forcing Australians to compete with the global market for Australia’s resources
    • The impacts of the climate crisis are disproportionately affecting lower-income and regional households, who are already feeling the financial strain more severely

    The report underscores the need for urgent climate action to protect Australian households from these escalating costs. Addressing the root causes of climate change is essential to lowering future risks and alleviating the economic strain that millions of Australians are facing.

    “Insurance costs keep on rising and, while competition across big business sectors is needed, the thing that is driving insurance costs is climate change,” said Richard Dennis, Executive Director at The Australia Institute.

    “The only way to keep insurance costs down is to keep fossil fuel emissions down. The more we heat the climate, the more expensive storms, floods and fires will be and, in turn, the more insurance will cost. It’s time we started to tax the fossil fuel companies to fund the damage that their previous emissions are already causing.”

    As the world’s second-largest fossil fuel exporter and fifth largest producer, Australia’s actions are making a significant contribution to the problem.

    “The increasing frequency and severity of natural disasters driven by climate change have resulted in higher payouts for insurance companies and rising premiums for homeowners,” said Mark Ogge,  Principal Advisor at The Australia Institute.

    “One in 20 Australian households now spend more than seven weeks’ worth of gross income just to pay for home insurance and in many regional areas, where household incomes are lower, the burden is even heavier.

    “As climate change continues to fuel more frequent disasters, entire suburbs or towns could become uninsurable.

    “Food prices have also surged and in some regions growing certain crops is becoming harder and harder, making food insecurity worse, and even without price-gouging by retailers like Coles and Woolworths, prices are expected to keep rising due to the ongoing climate crisis.”

    “Meanwhile, Australia’s energy sector keeps using expensive fossil fuels and there is serious underinvestment in renewable energy solutions which provide far cheaper electricity

    “Exposure to global prices for fossil fuels due to coal and gas exports has driven up local electricity costs and even if Australia moves away from international pricing, the continued risk of climate disasters damaging critical infrastructure will ensure that energy prices remain high for the foreseeable future.”


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    Cost-of-living and the Climate Crisis

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    Climate crisis escalates cost-of-living pressures



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  • The Limits of CGE Modelling

    Macroeconomics

    The Limits of CGE Modelling

    The surprising assumptions behind computable general equilibrium models and the implications of not knowing about them
    by Richard Denniss and Matt Saunders

    Authors

    Richard Denniss

    co-Chief Executive Officer

    Matt Saunders

    Senior Economist

    Economic modelling is a central element of economic and policy debate in Australia. Yet the assumptions that underpin the most commonly used macroeconomic models are rarely discussed even though they fundamentally influence model results. Too often, models are used as a tool of persuasion rather than providing objective policy advice.



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  • Life Savers Without Life Savings

    Labour Standards & Workers’ Rights, Retirement, Wages & Entitlements

    Life Savers Without Life Savings

    Early retirement and superannuation for firefighters and paramedics
    by Jack Thrower

    Author

    Jack Thrower

    Senior Economist

    Firefighters and paramedics save lives, protect us from the ravages of fire, and ensure the sick and injured receive the medical treatment they need. However, after a working life protecting others, these emergency workers face substantial risk of having inadequate retirement incomes.

    Firefighters and paramedics are regularly compelled to retire early due to particular barriers to working beyond the age of 60. Workers in these intense and challenging roles should have access to early retirement options. However, early retirement means fewer years for superannuation to grow and more years in retirement drawing on superannuation.

    The possibility of superannuation running out is significant even under relatively optimistic assumptions.

    This paper provides simulations of retirement income trajectories for firefighters and paramedics under a range of assumptions. For firefighters, these show, under relatively optimistic assumptions, an early-retiring single firefighter can expect their superannuation to run out six years before male life expectancy, nine years before female life expectancy, and 15 years earlier than for a regular retiree (retiring at 67). Under alternative scenarios, incorporating plausible risks, an early-retiring firefighter can expect their superannuation to run out 15 or more years before life expectancy.

    For paramedics, the challenges are similar and severe. Our simulations indicate that, even under optimistic assumptions, an early-retiring single paramedic can expect their superannuation to run out seven years before male life expectancy, ten years before female life expectancy, and 14 years earlier than for a regular retiree. Considering plausible risks, an early-retiring paramedic’s superannuation could run out 15 or more years before life expectancy.

    To extend superannuation longevity through to the age of their expected lifespan an early-retiring firefighter or paramedic would need to reduce their annual living expenses by 18.5%.

    Given the challenges of continuing their work in these intense roles past age 60, it is unacceptable that retired firefighters and paramedics should have either significantly reduced living standards or risk running out of superannuation in retirement.

    Among the range of potential policy responses considered in this paper, one response with promise is to increase employer superannuation contributions for emergency responders and supplement this with a one-time special superannuation contribution for workers already approaching retirement.



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  • Submission to Industrial Relations Victoria Inquiry on Restricting Non-Disclosure Agreements (NDAs) in Workplace Sexual Harassment Cases

    Employment & Unemployment, Gender at Work, Labour Standards & Workers’ Rights, Wages & Entitlements

    Submission to Industrial Relations Victoria Inquiry on Restricting Non-Disclosure Agreements (NDAs) in Workplace Sexual Harassment Cases

    by Lisa Heap and David Peetz

    Authors

    Lisa Heap

    Senior Researcher

    David Peetz

    Laurie Carmichael Distinguished Research Fellow

    It is generally reported that NDAs can benefit victim-survivors by providing anonymity and privacy where that is the victim-survivor’s choice. However, it is also reported that power imbalances between victim-survivors on the one hand and perpetrators and employers/organisation on the other have left workers feeling they had little choice but to sign NDAs.

    NDAs have had the impact of silencing victim-survivors, disguising the actions of perpetrators and covering up the prevalence of sexual harassment and other forms of gender-based violence and harassment within organisations. At times, this has enabled harassers to remain in the same workplace or move within industries and continue to engage in sexual harassment.

    The focus of this submission is on the issues of transparency associated with NDAs and the impact of these agreements on public interest concerns regarding the prevention of sexual harassment and other forms of gender-based violence and harassment at work. We believe that greater transparency regarding the practices associated with settling sexual harassment claims will lead to greater accountability. This accountability should be supported by legislative reforms that mandate minimum conditions such as those set out in this submission.



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  • Economic Prosperity, Public Sector Restraint

    Wages & Entitlements

    Economic Prosperity, Public Sector Restraint

    Unpacking South Australia’s Economic and Fiscal Advantages in the Shadow of Public Sector Pay Erosion
    by Jack Thrower

    Author

    Jack Thrower

    Senior Economist

    New report contrasts South Australia’s economic progress with continued public sector wage restraint

    By many measures, South Australia has enjoyed the strongest economy of any state in Australia. Its economic growth has been faster in recent years than any state – and in per capita terms, its prosperity has improved twice as fast as the national average. It enjoys a stable, diversified economic base: reflecting a virtuous combination of strong business investment, exports, household consumption, and government spending (both on current services and on capital investment). The state’s labour market has been operating at or near record-low levels of unemployment and underutilization.

    Unfortunately, this economic progress has not been reflected in improvements in state-funded public services in South Australia. The proportionate share of the economy contributed by state-funded services and infrastructure investments has been declining since before the pandemic (and is now lower as a share of the state’s economy than any other state). State public sector workers have borne the burnt of this restraint: their wages have lagged far behind inflation, resulting in a painful real wage cut for state employees.

    In a new research report, Economist Jack Thrower shows that real wages for state public servants in South Australia have declined by as much as 10% since 2019. This represents a one-tenth reduction in the real purchasing power of their salaries, imposing severe financial stress on tens of thousands of households – and undermining consumer spending and economic growth.

    The report also confirms that South Australia possesses abundant fiscal capacity to repair this damage to real compensation for public sector workers. The state government’s core revenues are growing much faster than core expenses, and the budget is projected to return to surplus this year – faster than any other state other than Western Australia. Rebuilding public servant wages to catch up to past inflation should be a vital priority for the state government.

    Please read the full report, Economic Prosperity, Public Sector Restraint: Unpacking South Australia’s Economic and Fiscal Advantages in the Shadow of Public Sector Pay Erosion, by Jack Thrower.

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  • Taking up the Right to Disconnect? Unsatisfactory Working Hours and Unpaid Overtime

    Employment & Unemployment, Future of Work

    Taking up the Right to Disconnect? Unsatisfactory Working Hours and Unpaid Overtime

    Go Home on Time Day 2024 Update
    by Fiona Macdonald

    Author

    Fiona Macdonald

    Acting Director, Centre for Future Work

    This year marks the sixteenth annual Go Home on Time Day (GHOTD), an initiative of the Centre for Future Work at the Australia Institute, that shines a spotlight on the maldistribution of working hours and the scale of unpaid overtime worked by Australians.

    The Australian labour market has remained relatively strong over 2024 although interest rate rises have pushed unemployment to over four per cent. Recent growth in wages has not been enough to take pressure off household budgets, or to offset the major reductions in real wages that occurred following the COVID pandemic. Across the economy, large numbers of workers want more paid work hours. However, the underemployment problem co-exists with overwork and with unpaid overtime that contributes to the loss of substantial amounts of income for working households.

    During the past two years there has been a great deal of public attention and debate about a right to disconnect from work outside work hours. New “Right to Disconnect” laws came into effect in August 2024. While it is early days, these laws could already be having a positive impact including through raised awareness that workers should be free to enjoy their personal time without work demands. Our research indicates that unpaid overtime hours were fewer in 2024 than in previous years, both pre- and post-COVID pandemic years.

    Unpaid overtime
    On average, employees reported they performed 3.6 hours of unpaid work in the week of the survey, equivalent to       10.9% of total working hours.  This unpaid overtime equates to 188 hours per year per worker, or almost five standard 38-hour work weeks.

    •  If  unpaid overtime were valued at median wage rates, this means the average worker is losing $7,713 per year or $297 a fortnight.
    • At the economy-wide level, this equates to more than $91 billion of lost income per year.

    The personal and social costs of unpaid overtime, through working outside of normal hours, include negative consequences for health and wellbeing and relationships:

    • Four in ten workers report physical tiredness (42%) and feeling mentally drained (40%)A third of workers experience stress or anxiety (32%), and one in four experienced interference with personal life/relationships (29%).One in five workers experience disrupted sleep (22%).
      • One in three workers (36%) indicate that unpaid overtime is either expected or encouraged in their workplace.
    •  The most common reason for working outside scheduled work hours is too much work (41%), with the second most common reason being staff shortages when other staff are absent or on leave (31%).

    Dissatisfaction with working hours
    Across the whole labour market, almost half of all employed workers (45%) are unsatisfied with their working hours – wanting either more or fewer hours.
    o One in three workers (32%) reported that they wanted more paid hours. This desire was especially strong among workers in casual jobs (51%). Over four in ten workers (43%) aged 18 to 30 years of age wanted more paid hours.
    o Just over half of workers (55%) indicated their hours were about right.

    To calculate how much pay you are losing through unpaid overtime go to our unpaid overtime calculator at gohomeontimeday.org.au



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