A very Thatcher-berg budget signals tougher times for the social purpose sector

Neil Pharaoh looks at the spin, the substance and the impact for our sector of Tuesday’s budget. 

The headlines of this budget are around the substantial tax cuts, and “business leg” recovery investments being made, but behind the bluster and bang, there are deep structural crevasses this budget will cause for civil society. The budget is equal part Thatcher, Howard and Frydenberg – with middle class welfare through tax cuts front and centre, “business-led” tax benefits at the expense of welfare and social security, and lots of spin from one-off increases and payments, many not even coming close to offsetting the past six years worth of cuts in many areas. In each section I will touch on the spin, the substance and the impact for our sector. 

Let’s peal behind the headlines of “winners”.

People in receipt of government payments will get two payments totalling $500, a quick sugar hit, but with no increase in Newstart or continuation of higher rates of JobSeeker, coupled with many government payments including pensions being frozen from indexation this year will mean many reliant on payments will be worse off in the medium and longer term. The spin is cash payments. The substance is real decreases in social security. The impact for the social service sector will be higher demand around homelessness, food security, mental health – and a transfer of many costs back to state government budgets that are already straining. While the additional places for home care for the elderly are great, if your real income due to pension freezes is going backwards, you will struggle to stay housebound.

“Women” get a category of their own in this year’s budget, with some loosening of requirements for government paid parental leave, as a temporary measure due to COVID-related unemployment. A paltry $231 million is allocated to address the structural impact of COVID (disproportionately hurting women), which is in direct contrast to the billions put to construction which overwhelmingly benefits men. For women, who have been repeatedly hit hard across COVID and are already behind the ball in super and salary generally, this $231 million is as close as you will get to a cherry on a shit sandwich. The spin is investments for women, the substance is a token bread crumb, the impact will be continued gender inequality baked in for the entire COVID recovery. The kicker is that industry super funds which have been leaders in advocating for equal numbers of women into management and onto boards may no longer be allowed to advocate for causes which do not directly increase return for members, a higher threshold than today on new announced superannuation “reforms” – targeted specifically at the increased influence of industry superannuation. 

Government services, new funding was announced for many government organisations such as bureau of meteorology, treasury and finance, as well as to much fanfare to organisations like CSIRO. The spin is investment in government services, the substance is these one-off top-ups are less than the endless efficiency dividends and annual cuts many of these organisations have faced. The consequences for the sector will be short sugar hits in some areas, but not ongoing funding. 

The environment was mentioned in this year’s budget, the first time in a while for a Conservative government, with $233 million into four national parks, and investments into mangroves and tidal marshes and ocean health, as well as recycling infrastructure. The spin is big investment into the environment, the substance is that a couple of “winners pick projects” look to be funded. I am not saying those projects are not worthwhile, but it continues a worrying trend (al la the Great Barrier Reef Foundation funding) of picking a couple of “captains choice” projects, as opposed to increasing overall support for National Parks and scientific-based environmental projects. 

There are however a few bright spots in the budget.

Additional investment in apprenticeships (100,000 new places at a cost of $1.2 billion) and supports for young people transitioning into work from unemployment (via a JobMaker program of subsidies of $200 and $100 a week depending on a person’s age) as well as 50 per cent wage subsidy for apprenticeships will all be critical to address some of the structural issues caused by COVID, which have resulted in substantial increases in unemployment amongst young Australians. While detail is still to be released, this looks to be one area where the spin and substance align, and may assist the substantial headwinds of youth unemployment which we will be facing. 

Mental health also looks to be a winner. The government has rewarded the “big players” – Lifeline, headspace, Beyond Blue and Kids Helpline – and this will be a welcome reprieve, but many organisations working in and around this space will be saddened that more focus wasn’t given to early intervention, new innovation models, and funding outside what is appearing like the “big few” mental health organisations. The doubling of medicare rebated psychology places to 20 sessions is another win for this sector, although it looks like the rebate amounts are frozen, meaning more out of pocket “gap” costs. 

Gas continues to be a personal frustration of mine. Australia is one of the world’s largest producers of natural gas in the world, yet we have some of the highest prices globally. Our prices didn’t used to be as high as they are today, which impacts those in older homes, or reliant upon gas for heating, as well as industry. We used to have a domestic gas market which was low cost, until we connected the domestic market via an export terminal, now we pay the international spot price for gas, whereas what we export benefits from long-term “bulk” discounts. Opening more gas fields (which received over $50 million) in this budget will not correct the issue. We could have fracking wells in every person’s yard and still not shift the dial on the international gas price – again, spin is investment in gas and lower prices for consumers, substance is we will never get lower prices unless we have a mandatory domestic market. The impact for the sector is gas prices will continue to rise.

A couple of areas which need a bit more digging include the announced extra funding to the NDIS of $3.9 billion, it is unclear as yet whether this is increasing current rates, or adding new components to the NDIS. Regardless we should all be worried about the increasing independent contractor models rolling out through the NDIS, are we really allowing “choice”, or just creating the next Aged Care Crisis?

Plenty of money will go to shovel ready projects, almost $14 billion on specific projects, $2 billion on use it or lose it road upgrades, an additional $1.5 billion into manufacturing support and $2 billion for water infrastructure. Given these are largely male-dominated industries, this has the potential to lock in almost $20 billion of spending towards men for the next decade – again, the gender equality lens is missing here. 

As for that national building project after this recession? Sadly you won’t find it in this budget. 

The spin – money for all. The substance – a whole lot of short-term sugar hits which sadly avoid some of the more pressing concerns of the social purpose sector. 

About the author: Neil Pharaoh has spent most of his voluntary and professional life in and around social purpose organisations, government, public policy and advocacy. Neil has been behind many leading social policy and advocacy campaigns on gender rights, equality, medical research and education, and ran for Parliament in Victoria in 2014 and 2018. He regularly runs workshops and advocacy sessions and advises leading social purpose organisations on their government engagement strategy and systems. @neilpharaoh on LinkedIn, Twitter, Instagram and Facebook. 

Happenings on the hill is a fortnightly column focusing on all things politics, policy, campaigns and advocacy. Stay tuned for updates around political trends and elections, lobbying and advocacy news, and hints, tips and ideas on government engagement that are specifically written for the social purpose/for purpose sector.

If you have any ideas, suggestions, tips or questions, please feel free to email Neil Pharaoh at neil@neilpharaoh.com.au or reach out to him via social media at LinkedIn, Twitter, Instagram and Facebook @neilpharaoh.