Putting people most in need at the heart of the Budget is the smartest move we can make
Putting people most in need at the heart of the Budget is the smartest move we can make?
For ACOSS and many, if not most of its members, the 2024 Federal Budget Papers made for exceptionally hard reading.?
We know that conditions are currently more challenging than they have been in a generation. Australia is dealing with a slowing economy, rising unemployment, falling spending power, a housing insecurity crisis, and of course a climate crisis.?
People experiencing poverty, disadvantage and hardship are aching for assistance, and community service organisations are not able to keep up with the requests for help.?
The Federal Government understands all this, but the Budget didn’t have the right solutions to the challenges. It tinkered with the problems; it did not systemically tackle them.?
Meanwhile, those living with dire financial hardship continue to do so.?
Like everybody else, ACOSS wants to see inflation come down as soon as possible. This is vital because the previous interest rate hikes are likely to push another 100,000 people into unemployment next year. But the solutions laid out to these problems are poorly targeted and not at the scale needed to make a real difference. The Budget’s cost-of-living relief is way too little for those who need it most and too much for those who do not.??
The government delivered woefully inadequate help to those with the greatest need. It extended the higher rate of JobSeeker to fewer than 5,000 people whose work capacity is 0 to 14 hours per week. It increased Commonwealth Rent Assistance by 10%, which is up to $9 a week for a single person. And it delivered an energy rebate of $300 to each household regardless of their income, which averages out at $6 per week for 12 months.?
The majority of people on Jobseeker and related payments will only benefit from the one-off $300 energy rebate. We should be mindful that many people on JobSeeker live in cars and caravans and will miss out entirely.??
Yet the Budget delivered a tax cut worth $87 per week, plus the energy rebate, for someone on $200,000 a year.??
On the climate front, ACOSS wanted to see a major government investment in rooftop solar and other renewables for low-income households, as a flagship of our energy transition during a climate crisis. We did not, and as a result people on low incomes remain highly vulnerable to the climate crisis.?
What the Federal Government did in the Budget was spend a little bit of money on a lot of different items, with a very limited set of major priorities. Its main spending was on tax cuts, defence and the energy subsidy. Other spending was thinly spread across a range of areas, without substantively tackling the challenges in any of them, including the following over the next 5 years including:?
However, continuing the severely inadequate rate of JobSeeker is a gaping hole at the heart of this year’s budget. In not raising the rate, the Government made a deliberate decision to keep people in poverty. This decision came despite the repeated calls and the overwhelming evidence presented from grassroots advocates, our sector, the Economic Inclusion Advisory Committee, leading economists and over 300 women leaders.?
Its extension of the higher rate of JobSeeker for people who cannot work more than 0 to 14 hours will support just 4,700 people in total, who will receive an extra $27.50 a week. This is not even half of one percent of the over one million people receiving JobSeeker and related payments. This is not to mention that these people should be on the Disability Support Pension.??
There are about 3.3 million people, or 1 in 8, living below the poverty line. Income support is critical to Australia’s response to homelessness, family and domestic violence, disadvantage and marginalisation, as well as physical and mental health. Recently, the Australian Institute of Health and Welfare released disturbing new statistics showing that in 2019, 30% of suicides in Australia were people on either the Disability Support Pension or unemployment payment, despite being just 5.7% of the population. Men on income support were almost 3 times more likely to suicide, and women on income support were 3.3 times more likely.?
How can governments continue to ignore the deep harm being caused by inadequate income support payments in this country? And if governments are concerned about the bottom line, we know that raising the rate of JobSeeker is affordable and not inflationary.?
ACOSS’ own polling and research demonstrates strong community support for raising the rate. So, the key questions is: Why is this not a top priority for a first-term Federal Labor Government in 2024??
The government’s spending on social policy was dwarfed by its spending on the Stage 3 tax cuts. In its first three years, the average value of these tax cuts will be approximately $26 billion a year. The recalibration of Stage 3 is fairer than that devised by the previous government. However, even with the adjustments to the rates, men are still getting almost 60 per cent of the value of those tax cuts between now and 2026. And half of the annual value of the revised cuts still go to the highest 20 per cent of taxpayers. What’s more, the Stage 3 cuts far outstrip the other cost-of-living measures contained in the Budget.?
Despite the government prioritising the need for so-called ‘restraint’, it has kept overly generous tax concessions and subsidies on the books. With this Budget, we will continue to spend $7 billion per year on fuel excise credits and forego at least $4 billion a year by not charging a royalty on offshore gas mines. The major tax expenditures, which is revenue foregone each year from tax concessions, still include:?
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Certain concessional tax treatment of investment income can be justified, for example to support people to save for the long-term through super. But Australia cannot afford this current level of largesse, if the government is to fulfil its responsibilities to provide affordable housing, alleviate poverty, ensure quality essential services, and deliver better climate action.?
Australia is the second wealthiest country in the industrialised world. We have the wealth to better tackle a range of social and environmental challenges. We have the wealth to end poverty.??
What we lack is a budget and taxation framework that smartly taps this wealth in a way to meet community needs, reduce poverty levels, raise living standards and improve our overall quality of life. Instead, Australia is the ninth lowest taxing country in the OECD. According to The Australia Institute, if Australia were to collect the average amount of tax collected by OECD countries, then we would have to collect more than an extra $100 billion every year.?
Both major parties are risk-averse in contemplating major taxation reform, even when the Budget haemorrhages subsidies and concessions to multinational corporations or those with a relatively high level of personal wealth. Civil society will need to push this government to embrace the tax reform discussion we know we need to have. ACOSS will continue to call for tax reform which builds the revenue base we need to meet community needs in a fairer and more responsible way. Our tax system should improve social, economic and environmental outcomes, not create more harm or disparity amongst us.??
Australia has also one of the lowest public expenditure levels in the OECD, in fact the 6th lowest. And we have the lowest unemployment payments as well. We are a country with enormous potential, incredible wealth, with a poorly designed tax framework and miserly levels of public spending.?
Australia’s low levels of spending were on clear display in the Budget’s near-total neglect of frontline community services. This is a government that won’t raise the rate, neither will it fund the community services helping people who are trying to cope with poverty, disadvantage and hardship.??
So many community organisations made compelling requests this year for urgent funding increases to assist more people desperately seeking help, to retain workers and offer them better conditions, and honestly to just keep the lights on in their organisations.?
Yet, the government provided the barest of minimums. This is even more shocking given the national conversation that preceded the Budget on addressing family and domestic violence, and the widespread demands to urgently boost funding for related frontline services.?
Despite some incremental progress in the past two years on indexation of Commonwealth grants and supplementation funding provided in October 2022, the Government shows no real signs of delivering the ‘better funding process’ it promised for our sector.?
After more than a decade of chronic underfunding, our sector has become accustomed to getting the scraps from the table and feeling a pressure to say thank you, and to take comfort in the fact that ‘it could have been worse’. We should not have to say thank you for simply being remembered, somewhere, in this vast $700 billion budget.?
The way services are being funded is nowhere near good enough. We are a major national contributor; we are first responders; we help Australia navigate disaster after disaster. But people working in our sector are themselves facing homelessness and financial hardship, it is that dire.??
We should also take strength from knowing that community attitudes have changed over the past few years, and the times suit us. Attitudinal research from leading organisations like RedBridge Group demonstrates that we are not an electorate influenced by a politics of envy.??
People want the politics of empathy. Research shows that people want their local members to reflect compassionate, community values. And they expect government to genuinely help people in poverty and disadvantage and are frustrated when it does not.??
We must make it clear that the government ignores us at its own peril, that there is a material risk for continuing to sing our praises without resourcing us properly, and to remind them that their own electorates will take a dim view of it as well.??
We are twelve months away from an election, and our collective voice and advocacy has never been more important. We must continue to champion economic, social and climate justice. Ours is not just a sector, it is a community movement.?
ACOSS and our allies will work every day to grow our campaign to raise the rate of JobSeeker and Youth Allowance and we won’t stop until it is achieved. We will continue our campaign for fair, fast and inclusive climate action and to stop the reckless spending on fossil fuel and gas.?
We will continue to call for full and fair funding for community services, so that everybody who needs help can access it easily and quickly. We will continue to call for everyone to have a safe, secure and affordable roof over their heads. We will continue to argue for a better and more equitable taxation framework that does not waste money on unnecessary subsidies and concessions.?
And we remain steadfast allies for Voice, Treaty and Truth for all Aboriginal and Torres Strait Islander peoples and will advocate for a bigger role for Aboriginal Community Controlled Organisations.?
Putting people most in need at heart of our Federal Budget is the smartest move we can make.??
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