Crowing about a budget surplus? There are better ways for Chalmers to measure economic success
This week's posts are being sourced and moderated by the Antipoverty Centre (@antipovertycent) to spark thinking and discussion about poverty during Anti-Poverty Week. In today’s article focused on the Treasurer’s recent announcement of a second consecutive budget surplus, Kerry Beake (@CareNutritionAU) argues that the true measure of a country’s economic success should include how its most vulnerable citizens are faring.
I am a 54-year-old woman, tertiary educated and now living in poverty. I have lived in and with various degrees of poverty while growing up and studying, with times of reprieve. I find my myself in poverty again due to a series of life events that were triggered when I began caring for my father with dementia in 2018. This led to failing my final placement unit of a dietetics degree through discrimination and lack of university support, and taking on the role of a full-time carer. Things got worse after hiring a registered builder at the start of COVID to make the home safe for my father, as this builder subsequently left us with unfinished and non-permittable works. Despite being awarded compensation, the builder went bankrupt, and my father passed away in October 2023. The stress of this led to me needing to leave the part-time job I had while fighting this case. I have been unable to find work since and I am now back trying to complete that final unit to have a qualification that enables me to have secure work.
Poverty is not a choice people make. Circumstances out of our control can hit any time and any way. Working to raise the profile and eliminate the lazy rhetoric around poverty, as well as working with and for those who are trapped, is my goal regardless of the outcome of my study.
The celebration of the $15 billion budget surplus by the Australian Treasurer certainly raises concerns about how the government is managing economic priorities, especially in the context of ongoing poverty and inequality. While achieving a surplus might reflect good fiscal management on paper, it feels disconnected from the lived experiences of people who are struggling.
For many Australians living in poverty, welfare payments remain well below the Henderson Poverty Line, failing to meet even basic living costs such as housing, food, and healthcare. Instead of the media and the Treasurer focusing solely on the surplus, attention must be given to addressing the growing divide between those who benefit from the economic recovery and those who continue to be left behind.
A surplus doesn't mean prosperity for all, but it should provide an opportunity to reinvest in social programs that provide support for the most vulnerable. A balanced approach would ensure that budget surpluses are used to lift people out of poverty, especially at a time when cost-of-living pressures are soaring.
The government must consider expanding support for welfare recipients, raising payments in line with the Henderson Poverty Line, as well as not just commit but to actually invest in long-term solutions to eliminate poverty.
Celebrating a surplus while refusing to address these issues creates resentment and hurt to those who are living in poverty daily and leaves us feeling that the wealth of the nation is being prioritised for the most wealthy.
The Treasurer’s love for neoliberal economic theory and the celebration of his budget surpluses is reminiscent of the fiscal austerity of Thatcher, especially when social welfare is needing life support. This is not the only economic theory available, but it is one that has the poorest outcomes for those in poverty.
Neoliberalism is not the only way to organise society. For example:
Keynesian economics advocates for government intervention in the economy, especially during times of economic downturn or when social needs are unmet. Keynesians argue that governments should engage in deficit spending during hard times to stimulate the economy, invest in social welfare, and ensure that the needs of the population, especially those living in poverty, are addressed. For Keynesians, reducing poverty and unemployment would be higher priorities than a budget surplus.
Post-Keynesians are more radical, and critical of the emphasis on fiscal surpluses and austerity. They argue that poverty and inequality are not just symptoms of inadequate welfare, but structural problems created by unequal distribution of wealth and power in the economy. For post-Keynesians, social spending and redistribution policies should be at the forefront, and a surplus is seen as less important than ensuring full employment, fair wages, and an adequate social safety net.
Proponents of Modern Monetary Theory argue that government can and should spend to meet the needs of the economy, particularly in areas like welfare, public health, education, and infrastructure. The main constraint is inflation, not deficits or surpluses. MMT advocates would likely critique the surplus celebration as a misprioritisation, focusing on reducing the deficit at the expense of people's wellbeing.
From a Marxist perspective, a budget surplus might be seen as a tool that upholds capitalist structures, benefitting the wealthy and powerful while maintaining inequality. In this framework, the government’s focus on fiscal surpluses could be seen as a way to preserve the interests of capitalists (such as big businesses and the financial sector) rather than addressing the needs of the working class or those in poverty. Marxists would argue that the state's role should be to redistribute wealth more equitably and that a surplus celebration ignores the systemic nature of poverty.
Institutional economists focus on the social and cultural contexts of economic systems. They would argue that economic policies should consider the wellbeing of all citizens, particularly those who are disadvantaged, and that a surplus, in this context, is a sign of poor institutional design if it exacerbates social inequality or poverty.
Feminist economists often critique the narrow focus on financial metrics like budget surpluses because they fail to account for unpaid labour, care work, and social welfare needs, which disproportionately affect women. They argue that government spending should prioritise social infrastructure—health, education, childcare, and support for the disadvantaged—over achieving surpluses. Feminist economists would likely see the surplus as a missed opportunity to address systemic gender inequalities and lift people out of poverty.
Social economists emphasise the moral and ethical aspects of economic policies. They would argue that the role of the government should be to ensure the wellbeing of all its citizens, particularly the most vulnerable, rather than simply focusing on fiscal discipline. From this perspective, the budget surplus could be viewed as a failure to adequately provide for the poor and marginalised, as economic success should be measured in terms of human welfare, not just budgetary outcomes.
In all these theories, economic success is measured not by surpluses or deficits, but by improvements in social outcomes—reducing poverty, improving public services, and creating more equitable distributions of wealth.
The Australian government's focus on achieving a budget surplus treats the surplus as a key measure of success, at the expense of other indicators of societal wellbeing, such as poverty rates, inequality, and access to essential services. By focusing so heavily on achieving and celebrating the surplus, our Treasurer is limiting himself to one tool. In doing so, he neglects other economic models that would advocate for:
investing in public services and social welfare;
spending to meet the needs of society, not just balancing books;
addressing systemic inequality and redistributing wealth;
evaluating success based on human wellbeing and social infrastructure, not just financial stability.
It’s offensive that this focus on budget surpluses is celebrated both by the government and the media, while real issues like poverty, inequality, and underfunded social services remain largely unaddressed and ignored. A healthy economy should be about more than just a positive balance sheet—it should reflect the wellbeing of all people. If those in poverty are left behind while a surplus is paraded as success, it suggests that the government’s priorities are focused on the appearance of wealth while dismissing and being indifferent to the harsh ongoing realities many other Australians face. The government needs to shift away from celebrating economic symbols like a surplus to ensuring that wealth is distributed in ways that genuinely improve the lives of all.
Ultimately, the true measure of economic success should be how well a country takes care of its most vulnerable citizens, not just its fiscal bottom line.
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Note: The Antipoverty Centre raises funds independently to pay people on low incomes who write about their experiences in recognition of their expertise. Support this work by donating to the Centre’s dedicated Writers’ Fund is here. 100% of funds raised are used for this purpose. Past articles commissioned by the Antipoverty Centre are collated here.