‘This budget falls drastically short for Australians doing it tough’

The social sector has expressed its disappointment over the federal budget which it says leave too many behind

The Morrison government’s message to Australians was that “we have your back” – but the social sector says the budget missed an historic opportunity to bring all Australians along in the recovery from COVID-19.

On Tuesday night, Treasurer Josh Frydenberg handed down his second budget, reassuring the nation that the government “has a plan to rebuild our economy and to create jobs.” 

Coming in a year that has delivered us bushfires, a pandemic and our first recession in 30 years, it was touted as the most important federal budget since the second world war.

What it delivered was big spending and a big deficit (projected to hit $213.7 billion this year).

At the centre were accelerated tax cuts, cash splashes for pensioners, big incentives for business and a $4 billion JobMaker program, which aims to help around 450,000 people aged 35 and under back into work by subsidising wages.

What it didn’t include was an extension of JobKeeper beyond the end of March or a permanent increase in JobSeeker support – leaving millions of people facing life on $40 a day come January.

Social housing was also left out of the flurry of spending, in a move that some in the sector says “defies logic”.

‘A crushing let down’

The overriding message from the social sector is that it was a missed opportunity.

The Brotherhood of St. Laurence said while it was happy to see a focus on youth employment and training, the Morrison government has offered very little support to others in need.

“This budget falls drastically short for Australians doing it tough,” executive director Conny Lenneberg said.

“Those who are relying on income support have been given no certainty that they won’t be back on $40 a day come January, even though the government’s own predictions show unemployment will still be above 8 per cent at the end of this calendar year.”

She said it was alarming that at a time when 1.6 million Australians are relying on JobSeeker to get by, the government could hand down a budget that didn’t talk about social security.

“It’s time to take the politics out of social security,” Lenneberg said. 

“Making sure this country’s most disadvantaged people can get back on their feet is far too important.”

Anglicare Australia agreed that the budget left people on the lowest incomes “high and dry”.

“There were simple solutions to these problems: raise the rate of JobSeeker for good, and invest in social housing,” executive director Kasy Chambers said. 

“Instead we’re back to business as usual – handing out money to people who can already afford to renovate or invest.”

Australian Council of Social Service CEO Dr Cassandra Goldie said the budget provided a glimmer of hope on jobs for young people, but was a crushing let-down for many others without paid work.

She lamented that the budget had failed to deliver a permanent, adequate JobSeeker rate, despite leading economists telling the government that an adequate JobSeeker rate was far more effective than income tax cuts in generating the economic stimulus we need to rebuild out of recession. 

She echoed the sector’s disappointment over the lack of social housing investment, and also said the budget gave too much to prop up fossil fuels.

“Overall, the budget does not deliver enough investment to pull us out of the historic slump we’re in without leaving people behind. The government will need to do more to ensure that we are all in the recovery together,” said Goldie. 

New analysis from The Australia Institute shows that the headline grabbing income tax changes fanfared in the budget will disproportionately advantage wealthy Australians both now and into the future.

Optimistic assumptions

Concerns have been raised that the budget relies heavily on a number of optimistic assumptions.

These include the gamble that businesses will have the confidence to invest, that people will spend not save their tax cuts, and crucially that Australians will have access to a vaccine against coronavirus by the end of 2021.

Clair Victory, national president of the St Vincent de Paul Society, said the plan was somewhat fraught.

“This is the most important budget in our lifetime. And yet it is a precarious budget reliant on stimulated business and consumer confidence – assuming that reforms will boost economic activity and jobs will follow as a result,” Victory said.

Other ‘winners’ and ‘losers’

Aside from social housing investment and a rise to JobSeeker, other notable absences in the budget included childcare, universities, and people on temporary visas.

The budget also announced that Australia’s humanitarian intake cap would be slashed by one quarter (saving the budget $958.3 million in health and social spending over four years), and despite a boost to support for the Pacific and Timor-Leste, the international development budget remains “woefully inadequate”.

Meanwhile, $41.3 million is to be cut from homelessness services, something Homelessness Australia chair Jenny Smith said was “devastating”.

Advocacy groups Fair Agenda and Women’s Safety NSW have slammed the budget for providing zero dollars of new funding for the services victim-survivors of domestic violence rely on for their safety.

Change the Record said the budget failed to respond to the needs and demands of Aboriginal and Torres Strait Islander peoples who have been affected by COVID-19, and risked entrenching the poverty, housing insecurity and homelessness that drives people into the criminal legal system.

Volunteering was also sidelined, which Volunteering Australia CEO Mark Pearce said would have deep consequences for volunteers and the individuals and communities that they support.

“The federal budget has failed to recognise the need to invest in reinvigorating volunteering. Without coordinated action and investment, volunteering will continue to suffer,” he said.

“If volunteering is not reinvigorated, there is a knock-on effect to the wider charitable and not-for-profit sector – a sector which is vitally important in supporting communities through the COVID recession.”

The federal budget did include continued funding for Volunteer Grants of $10 million per annum, but Volunteering Australia had called for the funding allocation to be restored to 2010 levels of $21 million per annum.

But it’s not all doom and gloom.

There were some welcome initiatives for the sector including one-off payments for people on pensions, an additional 23,000 aged care packages, an extra $47.3 million for mental health and crisis support services in Victoria, the doubling of concessional psychology visits, $2 billion concessional loans to help farmers cope with the drought and additional funding to address the reduction in funding of frontline social services impacted by the cessation of the Social and Community Services Special Account. 

It has also been confirmed that charities that meet the requirements will be eligible to receive the JobMaker Hiring Credit.

The ACNC got a $2.9 million boost over three years to implement a program of field-based compliance reviews to intervene early where charities are at high risk of failing to meet governance standards.

Several new charities received the highly sought-after deductible gift recipient status including: the Royal Agricultural Society, the Judith Neilson Institute for Journalism, The Andy Thomas Space Foundation, The Royal Humane Society of New South Wales, Youthsafe, the Alliance for Journalists’ Freedom and The Great Synagogue Foundation Trust Fund. However China Matters Limited will have its DGR status revoked.

While there were no new impact investing measures in this budget, the sector remains hopeful that the May 2021 budget will include a package directed toward the implementation of the recommendations of the Prime Minister’s Social Impact Investing (SII) Taskforce.

“Our hope is that the Australian government takes up the opportunity that is impact investing to enable a reality where every dollar invested builds a better Australia and a better world,” Impact Investing Australia’s CEO Sally McCutchan OAM said.

To find out more about what the 2020 federal budget means for the social sector, join the free upcoming webinar where we discuss the implications of this year’s budget with an expert panel of three social sector leaders.

Our 2020 budget coverage is brought to you by Bendigo Bank