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Budget 2016 – User Pays Becoming More Entrenched

5 May 2016 at 10:02 am
David Crosbie
Opinion: The more I read about the budget and consider what it means in practice, the more it becomes clear that Australia is moving towards a user pays system for many of our health, education, housing, and other previously government run services, writes Community Council for Australia CEO David Crosbie in response to the treasurer's pronouncements.

David Crosbie | 5 May 2016 at 10:02 am


Budget 2016 – User Pays Becoming More Entrenched
5 May 2016 at 10:02 am

Opinion:The more I read about the budget and consider what it means in practice, the more it becomes clear that Australia is moving towards a user pays system for many of our health, education, housing, and other previously government run services, writes Community Council for Australia CEO David Crosbie in response to the treasurer’s pronouncements.

Since the budget I have read talk of possible high end customs and border security services for those that can afford to pay – no more waiting in long queues with the riff raff of international travel.

While some characterise this as class warfare or say we have a tall poppy syndrome, my view is that the notion of equity and fairness is being eroded in the user pays pay more and get better services approach to the fundamentals of our community life. The user pays principle is fine if we are engaged in a commercial transaction like buying a car, or a meal. I am not sure it should apply to the necessary fundamentals of our lives, like healthcare.

I have always believed that what made Australia a better place to live than countries where the user pays principle has more currency – like the US – is that we care enough for everyone in our community and are prepared to share our wealth, to accept a community wide responsibility to help those less fortunate than ourselves. We do not rely on philanthropy, but we pace faith in our governments to ensure fundamental services are available to all.

This budget continues to make basic services more difficult for the poor to access.

In terms of what the budget means for the charities and Not for Profit sector, this budget fiddles around the edges, but changes very little in the short term, leaving many in our sector facing ongoing uncertainty.

In reviewing any budget, it is important to acknowledge that all governments tax and spend.  All governments seek to increase productivity, investment and jobs. It also now seems all governments continue to promise for the future what they cannot deliver in the short term – increased productivity and a balanced budget.  

The important economic picture is that our major areas of expenditure – social services, health and education – are growing at a pace (around 7 per cent a year) that defies the ad hoc attempts of government to deliver savings. It is very difficult to see how governments can ever achieve a surplus without major structural reforms to this compounding increase in expenditure combined with stalling income.

There are some good initiatives in the budget – most notably a commitment to invest in creating more youth employment opportunities. The now bi-partisan approach to reining in superannuation concessions for the rich is a relatively easy win. More investment in infrastructure will usually be welcomed, although there are no new major projects aside from the already announced submarines (partly an industry assistance package) and $30 billion to continue the rollout of the NBN.

The details of the budget will reveal a number of relatively small specific program initiatives – like the new funding to boost our diagnosis of Fetal Alcohol Syndrome – that will make a positive difference. Much of this detail is still to be uncovered. Unfortunately, the pattern of announcing new initiatives without explaining how the new programs will work in practice continues. More consultation and work before budget announcements would be welcome.

On the downside, it seems that renewable energy, environment, housing, general health, education, arts, international development / overseas aid, mental health, etc. are either largely off the reform agenda or already considered to be eating up too much government expenditure.  Cuts and uncertainty remain the predominant flavour of government approaches to these areas. There are few surprises here given the approach in this budget broadly reflects a continuation of government policies over the past few years.

I am not a supporter of income tax cuts or for extending what may be positive small business tax cuts to large businesses. As one of the beneficiaries of the deduction in income tax for people earning over $80,000 I would like to offer my six dollars or so a week back to the government to invest in better health, education, increased support for the marginalised both here and globally. I do not think I would be alone.

I also have some concerns about the projected savings by effectively reducing the income of welfare recipients – losing the carbon tax compensation to deliver over $1 billion in savings – and the crackdown on disability pensions which will involve up to 30,000 government directed medical assessments and is apparently going to save over $60 million.

Suicide rates are increasing, incarceration rates are increasing, inequity is increasing, for me these are the types of figures I would like to see being reported in our budgets and reduced over time. The CCA AusWeWant report (due out in the next couple of months) will highlight some of these issues.

Contrary to the purely economic view, very few of us want to live in a society where every interaction is treated like a commercial exchange.

I hope that the budget reply on Thursday focuses less on talking up an overly optimistic economic plan, and more on building the kind of society we would like to live in.

David Crosbie was part of an expert Not for Profit panel in Pro Bono Australia’s Executive Webinar on Wednesday along with Jackie Phillips, the director of policy at the Australian Council of Social Service and Krystian Seibert, the policy and research manager at Philanthropy Australia.

If you would like to hear the audio, watch the video or receive the transcripts, email

David Crosbie  |  @DavidCrosbie2

David Crosbie is the CEO of the Community Council for Australia (CCA).

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