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

Abstract

PurposeThis 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/approachA 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.FindingsThe 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 implicationsThe insights gained from this paper may help with future policy developments and promote future research on similar crises.Originality/valueThe 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.