What the social economy wants from the federal budget
Tuesday, 2nd April 2019 at 8:57 am
The expected theme behind Treasurer Josh Frydenberg’s first budget, to be handed down on Tuesday, is a stronger economy and a secure future. But what does that mean for the social sector?
As we head into an election – with speculation mounting that Prime Minister Scott Morrison will call a 11 May election this weekend – both sides of the political spectrum are keen to roll out promises that might win over voters.
Economists are suggesting Australia’s budget could be in surplus for the first time since John Howard was prime minister, and it’s expected that Tuesday’s budget will bring forward income tax cuts that have already been legislated as well as improve tax offsets for low-income earners.
But the Australian Council of Social Service said if speculation about income tax cuts rings true, the biggest winners will be those on high incomes.
There are also rumours some of the money set to improve the bottom line could be funds not spent by the National Disability Insurance Scheme.
Although on the weekend, just days before the budget, the government announced an $850 million boost to increase prices for a range of NDIS services.
Meanwhile, healthcare is shaping up as a key economic battleground for the election, with the government revealing it will spend an extra $496 million on cancer treatment over six years from 2018/19, including $80 million on a new national facility at Melbourne’s Peter MacCallum Cancer Centre.
And $129 million has already been announced to extend the controversial cashless welfare card to all of Northern Territory, and to Cape York communities in Queensland.
However foreign aid organisations are bracing for further cuts to the sector.
Last week, Save the Children urged the federal government to avoid slashing $500 million from the foreign aid budget to finance a new infrastructure facility in the Pacific, which now looks set to go ahead.
With several social sector organisations left out of the budget lock-up, there are some concerns there has been a slide in transparency on the budget.
So, what will the sector be looking out for?
Pro Bono News spoke to experts across the sector to get their budget wishlist…
Andrew Cairns from Community Sector Banking identified a number of overall themes he hoped would be reflected:
- Items relating to impact investment.
- A better application of limited resources rather than relying on future support. New incentives to change trajectory.
- Progressive tax reform to reward the development of new business models that recognise importance and outcomes of impact. Investment in preventative measures but also for incentivising self-determination and innovation.
- The government currently supports for-profit organisations and NFP organisations, but what about opportunities to support for-purpose organisations?
- Welfare be treated as an investment rather than an expenditure.
Social Ventures Australia CEO Suzie Riddell said they want to see the government taking steps to tackle the structural problems that are preventing people and communities from thriving.
“Funding the right services and programs for people is essential, but if we don’t fix the systems that generate some of these problems we’ll always be chasing our tail,” she said.
Regarding specific initiatives, SVA want to see:
- the National Education Evidence Institute funded;
- the government use its vast procurement spend to support businesses that are also achieving social good and invest in helping these businesses build their capability to take on large contracts;
- more done to address housing shortages for people with disability and others struggling to find appropriate housing across the country, using SDA as a template for driving investment in other forms of badly needed social and affordable housing; and
- a rise to Newstart.
In the days leading up to the budget ACOSS has raised concerns that bringing forward the government’s tax cuts will worsen inequality, and it has also criticised the government’s pre-budget announcement of a one-off Energy Assistance Payment – $75 for singles and $125 for couples – which excludes people on Newstart.
In its budget submission, ACOSS called for revenue raising to fund services, including disability services, and urged action on a royal commission into the abuse suffered by people with disability.
The recommendations included:
- Invest $2 billion in community services to restore funds cut to frontline services and respond to growing demand and rising costs.
- Expand wage subsidies for employers, training for people looking for paid work, employer engagement and career advice through a $500 million employment services reform package.
- Raise the rate of Newstart and Youth Allowance for single people by a minimum of $75 a week at a cost of $3.3 billion.
- Increase Family Tax Benefit for older children to meet rising costs and introduce a Single Parent Supplement to reduce child poverty at of cost of $630 million.
- A major direct capital investment in social housing, complemented by a new rental housing incentive which would guarantee affordability for people on the lowest incomes and a national Aboriginal and Torres Strait Islander housing strategy.
- A $320 million boost to funding for public dental services to double the number of adults treated over the next five years.
As part of a pre-budget submission, PWDA, with the Summer Foundation, National Shelter, and the Australian Network for Universal Housing Design, developed a package to address the housing crisis for many people with disability.
Their recommendations included:
- A National Housing Plan for people with disability as part of a National Housing Strategy.
- A review of the entire policy architecture governing Specialist Disability Accommodation (SDA) of the NDIS.
- $45 million for 1,500 flexible funding packages to make sure no young people with disability go into aged care facilities
- An increased mandate for the NHFIC to borrow for accessible and affordable housing for people with disability as a new stream of loans.
- An affordable housing supply initiative for NDIS participants that would provide equity for community housing projects.
- Mandatory accessibility features in all new housing, through the National Construction Code.
- That all new affordable housing is built to Liveable Housing Australia Gold Level Design Guidelines and funding is made available to modify existing social housing to meet the same guidelines.
- That the government rationalise its home modification assistance strategies (including NDIS, Department of Veterans’ Affairs and Aged Care Program) under one quality assurance framework, data collection strategy and research program.
- An increase in Commonwealth Rent Assistance by 30 per cent for people with disability.
- An investment in social housing through direct grants to states and territories, for people with disability.
Everybody’s Home, a national alliance of community, housing and homelessness organisations, is calling on Frydenberg to deliver investment that will make housing more affordable and decrease homelessness in the 2019 Budget.
In particular, they want to see the federal government:
- reduce tax breaks to property investors;
- reallocate tax savings to social and affordable housing investment to begin delivering the 500,000 social and affordable rental homes Australia needs;
- increase Commonwealth Rent Assistance to provide immediate relief for renters in chronic rental stress; and
- invest in homelessness services.
When it comes to foreign aid, from 2014-15 to 2018-19 there was a real-terms cut in all five budget years. A cut in 2019-20 would represent the sixth successive cut for Australian aid.
Against this backdrop, ACFID made a number of recommendations in their pre-budget submission including:
- A bipartisan commitment to rebuilding the development cooperation budget by 10 per cent each year for the next six years as a minimum first step towards reaching 0.7 per cent of GNI by 2030.
- Ensure new infrastructure projects are climate-resilient, gender-sensitive and bundled with “soft infrastructure” or community development initiatives which are funded by grants.
- Design a comprehensive climate change strategy that aligns Australia’s domestic and international action with its 2015 Paris Agreement commitments and use public funding to mobilise $3.2 billion per annum from all sources within five years.
- Re-align and increase investments in civil society – at home and overseas – commensurate with the importance placed on democracy, development and stability outlined in the 2017 Foreign Policy White Paper.
- Increase funding for the Australian NGO Cooperation Program (ANCP) by $50 million.
- Increase humanitarian program funding to at least $570 million in 2019-20.
- Increase funding to civil society organisations, including ANGOs and local NGOs and CSOs to at least 20 per cent of DFAT’s humanitarian funding.
- Restore budget transparency to Australia’s development cooperation program by meeting its obligations under the International Aid Transparency Initiative and remove the “not for publication” status of Australia’s AIFFP and for any future development cooperation program.
For the environment, David Ritter, CEO Greenpeace Australia Pacific, said rather than a wish-list he had a “common sense list” – looking for the kind of investment priorities you’d expect when “we’ve got just over a decade to avoid planetary catastrophe”.
- The Australian economy needs to be in line with the Intergovernmental Panel on Climate Change’s findings, that limiting global warming to less than 1.5°C requires rapid and far-reaching transitions in land, energy, industry, buildings, transport, and cities. Major transition is also required to reverse the longstanding decline of Australia’s natural estate and in social conditions.
- This budget should lay the foundations for that transformation, while at the same time building in just transitions for those most impacted and investing in resilience measures for both people and nature.
- This requires reversing the trend under the Coalition government which has cut investment in the Australian environment by about 40 per cent.
- This budget should end the subsidisation of fossil fuels, with the savings redirected to supporting investment in clean energy transitions and the safeguarding of nature.
“Ultimately, the test for this budget is whether it creates the foundations for a flourishing future for our county, in line with both the science and the hopes of the Australian people, or whether it continues to rewards the vested interest, like the coal industry, which are dragging us down,” he said.
In the Australian Conservation Foundation (ACF) budget submission, which Greenpeace supports, they also called on the Morrison government to fund policies that will “turn around Australia’s rising emissions trajectory and address our climate pollution problem”.
They also recommended:
- funding for a new national Environment Protection Authority (EPA) and a $1 billion-a-year national environment fund; and
- funding for a standalone Murray-Darling regulatory and compliance unit within a new EPA, consistent with the Productivity Commission’s recommendation to remove these functions from the Murray-Darling Basin Authority.
Some of the key things Volunteering Australia would like to see include:
- A restoration of the Volunteer Grants funding to 2010 levels at $21 million p.a. (currently $10 million p.a.).
- Five-year funding contracts for the community sector (with the application of indexation) to ensure fiscal certainty for volunteer programs.
- Designated funding for Volunteering Support Services post-2021, with assurances that the funding with include indexation.
- Allocation of $250,000 to support Volunteering Australia to acknowledge and celebrate the contributions of Australia’s volunteers through National Volunteer Week.
- Investment of $450,000 in the national online volunteering recruitment platform GoVolunteer and $100,000 p.a. for ongoing maintenance.
- Allocation of $5 million toward Volunteering Support Services and digital solutions as part of pre-employment programs.
For their wishlist, Impact Investing Australia broke it into three keys areas impact investing in Australia, impact investing from Australia and machinery of government.
Their recommendations included:
- $150 million in 2019/20 to be matched by Australian financial institutions and other societally focused investors to establish Impact Capital Australia (ICA).
- Capitalise on the good work already done and cement Australia’s position as a leader in impact investment in the region.
- Extend Australia’s support for related capacity building and intermediary development to further enable Indo-Pacific social enterprise development.
- Expand the tools and geographical remit of the AIFFP to increase its efficacy, timely deployment and leverage of private capital for maximum regional impact.
- Establish an Office of Social Impact Investment within the APS to provide a centre of excellence and capability and drive public sector capacity to engage with the market and private sector for a more efficient and effective allocation of existing resources to achieve social impact.
- Encourage a designated minister to champion development of impact investment.
- Establish a dedicated Outcomes and Innovation Fund to support proof of concept and scaling what works through outcomes-based commissioning, including social impact bonds.
Cooperatives and Mutuals
BCCM CEO Melina Morrison said “in this era of accountability” they expect government to respond to the rising demand for consumer directed care, particularly in aged care and disability care in this year’s budget.
Additionally, with many BCCM members running small businesses and working in the agricultural sector they welcome all budget measures that support these contributors to Australia’s economy.
Their wishlist included:
- That regulatory reform will be a priority for legislators and this will be the year that we level the playing field for CMEs to compete with big business.
- The passage of Treasury Laws Amendment (Mutual Reforms) Act 2019, which contains reforms including: the capability for mutuals to raise capital and adding the legal definition of mutual entities to the Corporations Act.
- The inclusion of co-ops in the Commonwealth Modernising Business Registers program.
- Initiatives to reduce red tape for businesses and to combat the incidence of director malpractice.
- That the benefits from registry modernisation projects should flow to all business forms, not just those that are regulated under Commonwealth Laws.
To find out if the reality lives up to the expectation, visit Pro Bono News on Wednesday, where we will be breaking down what the budget means for the social sector.
We are also hosting a complimentary webinar on Thursday where a four person panel of experts from the community and social welfare sectors, will dissect the budget and its impact on the social sector.