Budget more slow-burn than big bang

Posted 15 May 2014 10:15am
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Jackie Brady, Acting Executive Director, CSSA

(As published on Eureka Street)

For poor and disadvantaged people the impact of this Budget will burn like a slow fuse. There is no big bang that means that people's lives will be drastically different tomorrow, but the tinkering measures will continue to hurt people over time.

What the Budget signals is not an end to the 'age of entitlement', as there are still plenty of beneficiaries of government expenditure or foregone revenue; but an end to an age in which people can be confident that the Australian Government will provide the safety net they need when times get tough.

Having a job is the best income support measure, not only for the economic benefits but for the social benefits as well. But the Budget's measure that focuses on time-limited welfare payments for young people under 30 years of age signals a significant shift in this Government's thoughts about where such responsibility rests. Young people in Australia under the age of 30 will now only have access to either Youth Allowance or Newstart Allowance for six months of the year.

While this Budget does provide funding for wage subsidies, these are reserved for older Australians. There is a glaring absence of any real programs designed to promote youth employment, and programs designed to assist older teens to transition to education, training or employment will be scrapped at the end of the year.

Who will provide for such young people when government funded income and/or other support measures are no longer available? Is it family, friends, acquaintances, the charity or the not-for-profit down the road? The answer may depend on individual circumstances, but there is no doubt that boundaries will be tested regarding who is responsible for what in this civil society which the government so readily promotes.

Targeting of young people currently in receipt of the Disability Support Pension and re-assessing their eligibility for it under new work activity measures is also concerning. Research that CSSA undertook a few years ago revealed that efforts to promote employment of people with a disability was marginal. The absence of manual-type work was also impacting negatively on a person's capacity to secure a job if they had a disability.

It would be good to see the Government working proactively to balance that side of the equation before changing policies to shift people into a workforce not ready and/or unwilling to accept them.

A significant gap in this Budget is around homelessness and affordable housing. While it does confirm an already flagged 12-month extension of homelessness funding, the Government's decision to do away with the fifth round of funding under the National Rental Affordability Scheme signals a big shift ahead. It is encouraging that the Government wants to review its commitment to the scheme in consultation with key stakeholders.

Alongside the Government's investment in roads, ports and airports it makes logical sense for the Government to commit to a critical investment in housing which also has great potential to create jobs and address housing affordability. Housing affordability will be an issue for many people affected by cuts to their welfare income.

$240 million will be cut from the Department of Social Services over the next four years on programs that assist poor and disadvantaged people. This is being tied with a 'red tape reduction'/'efficiency, production and effectiveness' bow, but it will mean that people will miss out on services at critical times in their lives, such as emergency relief funding and access to financial counselling services.

There is also a freeze being placed on indexation funding for programs delivered within the social services portfolio for two years. This is effectively a further cut in funding. Not only will people lose access to services, but some people employed in the sector will lose their job.

Mercifully, many programs within the suite of existing Family Support Programs will remain with projected funding levels — I believe it has been the strength of the current Minister for Social Services and his repeated support for this program area that has saved it from many of the more savage measures in the Federal Budget.

The Medicare co-payment proposal is another measure which is set to test the principal of universal access to a first class medical system. It has the potential to be most disadvantageous to poorer individuals and families where finding $7 to visit the doctor may test the budget when one is living on a minimal income.

Certain groups and concession cardholders will receive ten visits for free before such a payment is required, but still it would be good to see an ongoing review of this measure to ensure that this threshold is tested and we know that no-one is left behind. The same test should apply to the proposed changes to the PBS scheme.

The changes to pensions and allowances, in relation to eligibility and to indexation rates, and the halting of threshold levels for payments such as Family Tax Benefit A will impact on weekly household budgets. Given the structural changes to these payments, the income loss over time will increase over forward years.

You don't need to be an economist to assess that collectively these measures will impact negatively on the income levels of people who are poor and disadvantaged. The discussion now must be who will pick up the pieces left behind by Government in developing a system with obvious gaps.

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