Scott Morrison has flagged budget changes to education, welfare, and health spending

Photo: Stefan Postles/ Getty.

Scott Morrison says the federal budget will involve plans to “invest” in the key areas of health and education “in a more sustainable way”.

The treasurer is trying to set expectations ahead of his first budget in three weeks and, in a speech to the Business Council of Australia, Morrison has walked through the familiar themes of the importance of managing the transition in the economy.

Morrison said: “The conditions are in place for the next phase of Australia’s transition, namely businesses in the non-resources sector increasing their investment, while our resources sector continue into its production phase, growing its market share in foreign markets.”

We know a gradual reduction in the corporate tax rate has been under consideration, as have some changes to the superannuation tax benefits for the wealthy. But Morrison has also signalled that there will be changes to the big-spending departments of welfare, health, education and defence. He told the BCA (emphasis added):

Through this disciplined process, our budget will also be able to achieve the equally important objectives that the budget will address to:

• help more Australians, especially young people, to get into work and get off welfare and become independent over their working life and beyond
invest in education, health and social services, in a fairer and more sustainable way that taxpayers can afford – rather than higher taxes and higher debt, and
• protect our national security, keep Australians safe and make our communities stronger.

The themes are familiar: welfare reforms that encourage people off the dole and into work, as well as changes to education and health spending – two areas in which the Coalition tried, and failed, to introduce cutbacks in 2014.

Above all, as the government will face the electorate most likely just two months after budget night, Morrison must avoid a repeat of Joe Hockey’s 2014 disaster which shocked the community with the savage depth of cuts to government spending across the board.

We await the details.