Federal Budget Ends ‘Days of Borrow and Spend’ - Treasurer

The Federal Government says its 2014-15 Budget will deliver savings of more than $36 billion with major funding changes to jobs, health, education, welfare, foreign aid and the slashing of more than 16,000 public service jobs.

In his first Budget speech, Treasurer Joe Hockey told Parliament that the days of borrow and spend must come to an end.

Federal Treasurer Joe Hockey delivers his first Federal Budget.

“We know that for some in the community this Budget will not be easy. But this Budget is not about self-interest. This Budget is about the national interest,” he said.

In what was seen as an unexpected move, the Government announced a commitment to build a $20 billion Medical Research Future Fund linked to changes to Medicare.

The Treasurer told Parliament that the fund will, within six years, be the biggest medical research endowment fund in the world.

He said its funding of research will be in addition to existing levels of funding through the National Health and Medical Research Council and will be funded from the introduction of a $7 Medicare co-contribution, changes to the Pharmaceutical Benefits Scheme and other changes in this Health Budget.

“Health services have never been free to taxpayers so patients are being asked to make a modest contribution towards their cost,” Hockey said.

“From next year, funds will start flowing from the Medical Research Future Fund into new medical research.”

The Budget introduced the expected deficit tax along with major changes to dole payments forcing people under 30 to wait six months before they can obtain the welfare payment.

Shadow Treasurer Chris Bowen described the Budget as deeply concerning.

“This is a budget of deceit, attacking low and middle income earners,” he said.

The Australian Council of Social Service said it was deeply concerned that those who carry the greatest burden from spending cuts in the Budget are those who can least afford it.

“The Budget divides rather than mends. It entrenches divisions between those with decent incomes, housing and health care and those without them. It undermines the fabric of our social safety net with severe cuts to health, disability support, income support, community services and housing programs,” ACOSS CEO Dr Cassandra Goldie.

Here are some of the Budget measures affecting the Not for Profit sector included in the Budget papers.

• The Government says it will provide $6 million over four years to re-establish the Community Business Partnership to advise the Government on philanthropy in Australia. The Community Business Partnership, to be chaired by the Prime Minister, will bring together prominent business and community leaders to provide leadership and high-level advice for encouraging growth in volunteering and philanthropy and promote partnerships between business and community organisations.

• The Government will provide $1.5 million to extend the Community Development Financial Institutions Pilot Project for one year from 1 July 2014. Community Development Financial Institutions provide small loans and financial literacy education services to individuals who are not able to access affordable and fair financial products and services or who may resort to relying on riskier credit sources.

• The Government will provide $0.9 million over four years to establish the Disability and Carers Industry Advisory Council (DCIAC). The DCIAC will be co?chaired by a respected industry expert and the Assistant Minister for Social Services. The DCIAC will provide advice and recommendations to Government on proposed legislation and policies affecting the disability and carers sectors.

• The Government will provide funding of $29.3 million over five years from 2013?14 to introduce compulsory activities for Disability Support Pension (DSP) recipients under 35 years of age with an assessed work capacity of eight hours or more a week who have a participation plan. These activities will vary depending on a person's circumstances and will focus on obtaining employment. Sanctions for non?compliance will be introduced.DSP recipients with a severe impairment and an assessed work capacity of less than eight hours a week will be exempt.

• The Government will achieve savings of $12.3 million over five years by reducing the amount of time Disability Support Pension (DSP) recipients can leave Australia and still receive DSP. Recipients will receive DSP for a maximum of four weeks in a 12-month period should they travel overseas. All DSP recipients who leave Australia on or after 1 January 2015 will be subject to the new rules. Currently, DSP can be paid for absences from Australia for up to six weeks, on multiple occasions in any one year.

• Portability extension and exception provisions, which allow a longer or unlimited portability period under special circumstances, will continue to apply.

• The Government will achieve savings of $240 million over four years by reforming discretionary grant programs administered by the Department of Social Services. This will consolidate existing grants to create more efficient and effective programmes which will reduce red tape for service providers and remove the duplication of funding and services.

• The Government will achieve savings of $173.1 million over five years (including $1.5 million in capital savings in 2013?14) by not proceeding with the Supporting Senior Australians — Housing Help for Seniors — pilot measure, announced in the 2013-14 Budget, and due to commence on 1 July 2014.

• The Government will achieve savings of $508.1 million over five years by increasing the age of eligibility for Newstart Allowance and Sickness Allowance from 22 to 24 years of age, from 1 January 2015. Current recipients of Newstart Allowance and Sickness Allowance, aged 22 to 24 years of age on 31 December 2014, will remain on those allowances.

• National Homelessness Research Strategy — reduced funding. The Government will achieve savings of $3.1 million by returning uncommitted funding for the National Homelessness Research Strategy to the Budget. Homelessness research activities under way in 2013?14 are not affected.

• The Government will provide $115.0 million in 2014-15 to extend the National Partnership Agreement on Homelessness for a further year. This will ensure critical homelessness services continue to support some of Australia's most vulnerable people. This will provide much needed certainty for homelessness services.

• National Rental Affordability Scheme — discontinue incentive allocations The Government will achieve savings of $235.2 million over three years by not proceeding with Round 5 of the National Rental Affordability Scheme (NRAS). Funding for incentives from earlier rounds that are uncontracted or not used within agreed timeframes will be returned to the Budget. Funding for tenanted NRAS properties is not affected.

• National Respite for Carers Programme — redirection The Government will achieve savings of $7.7 million by not proceeding with further grants rounds in 2013?14 under the National Respite for Carers Programme, with $965.1 million over four years remaining in the Programme.

• Job seeker participation. The Government will achieve savings of $1.2 billion over four years by changing access to income support for people under 30 years of age, to encourage young people with full work capacity to be earning, learning or participating in Work for the Dole.

• From 1 January 2015, all new claimants of Newstart Allowance and Youth Allowance (Other) who are under 30 years of age must demonstrate appropriate job search and participation in employment services support for six months before receiving payments.

• After six months, claimants will be required to participate in 25 hours per week Work for the Dole to receive income support, and following this may continue to access employment services for a further six month period, including access to a wage subsidy in lieu of income support.

• From 1 July 2015, existing recipients of Newstart Allowance and Youth Allowance (Other) who are under 30 years of age will also become subject to these new arrangements. These people will have already served six months on Work for the Dole.

• Payment recipients who have a partial capacity to work, are the principal carer of a child, are part?time apprentices, are in education or are job seekers in Disability Employment Services or Job Services Australia Streams 3 and 4 will be exempt.