Australia's COVID-19 public budgeting response: the straitjacket of neoliberalism

Abstract

Purpose: This paper explores how neoliberalism restrains the ability of governments to respond to crises through budgetary action. It examines the immediate budgetary responses to the COVID-19 pandemic by the Australian government and explores how the conditions created by prior neoliberal policies have limited these responses. Design/methodology/approach: A review and examination of the prior literature on public budgeting and new public management are provided. The idea of a “neoliberal straitjacket” is used to frame the current budgetary and economic situation in Australia. Findings: The paper examines the chronology of Australia's budgetary responses to the economic and health crisis created by COVID-19. These responses have taken the form of tax breaks and a temporary payment scheme for individuals made unemployed by the pandemic. Practical implications: The insights gained from this paper may help with future policy developments and promote future research on similar crises. Originality/value: The analysis of Australia's policies in dealing with the pandemic may offer insights for other countries struggling to cope with the fiscal consequences of COVID-19.