The 2023 Federal Budget delivers some key elements of long-term wellbeing for Australia and the region, but these must be accompanied by deeper systemic reforms to change the things that matter most to Australians.

Budget measures on early childhood, wellbeing, climate, regional engagement and people- and place-centred reform are welcome and necessary, but will not reach their potential without systemic reforms outside the budget – government is a question of “how”, not simply “how much”.

These include redesigning government service systems to meet the needs of people and communities, enhancing social infrastructure with a guarantee for young children and families, and an inclusive national goal-setting conversation to provide guidance to public decision-makers.

The importance of the early years is clear, with the budget investing in vital early childhood education and care for more families.

This social infrastructure would be aided by the removal of the activity test, which represents a barrier to participation and an impediment to the long-term social and economic benefits to our economy and society. CPD has long recommended universally accessible early childhood education and care, which is currently being considered by the Productivity Commission.

The Investment Dialogue for Australia’s Children, between the Commonwealth and the philanthropic sector, on place-based responses to entrenched disadvantage, further emphasises the importance of the early years.

This initiative, alongside the Stronger Places, Stronger People program and the Social Impact Outcomes Fund, represents a timely reconsideration of the hands-off model of outsourced service delivery that has dominated Commonwealth government for several decades. CPD applauds the collaborative mission-based, locally connected approach that is more in line with building long-term resilience and wellbeing.

Measures to address disadvantage and economic exclusion will be impaired by Jobseeker rates that still leave recipients in poverty despite the $40 per fortnight increase. They will also be impaired by an ineffective national employment service that currently fails to support people with barriers to work into decent sustainable jobs. This is critical to address through the current Workforce Australia Inquiry.

The budget recognises the urgent need to position Australia for a post-carbon future with the announcement of a Net Zero Authority to guide Australia’s climate transition – a key recommendation of CPD and partners in our sustainable economy work over the past decade.

This will unlock investment in renewable energy for swift, just and orderly transition, along with investment in emerging industries to support Australia’s prosperity in the coming decades. The announcement of the Hydrogen Headstart program will support the rapid development of a key post-carbon industry. This fund should aim to catalyse rather than compete with private capital, and to create green industry ecosystems that extend beyond hydrogen.

We are also encouraged that Australia’s diplomatic capability in DFAT has received much-needed support at a time when regional engagement is more important than ever.

The continued work within Treasury on the Measuring What Matters framework will aid future budgets in contributing to the long-term wellbeing of Australians.

An important next step will be for the government to go beyond measuring, and also align decision-making processes with what matters.

This national goal-setting, informed by involved and inclusive consultation about the Australia we want to hand on to future generations, and the values it represents, will assist governments in making difficult decisions and developing appropriate methods of tracking budget impact.