A welcome investment in the care economy… but many left behind

After years of austerity, a pandemic and a recession, the 2021 federal budget has provided much-welcomed, and much-needed, investment in the care economy. But advocates warn many of those doing it tough are not included.

On Tuesday night, Treasurer Josh Frydenberg handed down a big spending, pre-election budget.

Unlike six months ago, when the social sector was left disappointed at the missed opportunity, this morning there is a lot to be pleased about.

The substance and focus of this budget have shifted since the last one, moving away from a construction-led economy towards much-needed investment in the care economy.

Investing in the care economy

At the centre of the budget is a $17.7 billion aged care package, spent over five years and including 80,000 extra home care packages.

There is also funding for child care ($1.7 billion), mental health ($2.3 billion), women’s safety ($1.1 billion) and the National Disability Insurance Scheme ($13.2 billion over four years).

There is a focus on reducing unemployment, with extra investment in the care workforce and training and skills development measures for people who are unemployed. However, with one job for every seven people seeking work, questions have been raised about the extent to which training will lead to jobs.

There are still many people that are missing out, and any hopes that we would “build back better” after the pandemic seem to be fading.

See also: The 2021 budget at a glance – Infographic

Frydenberg began his speech declaring that “Australia’s economic engine is roaring back to life”. But this budget suggests we are heading back towards the pre-COVID economy. 

Suzie Riddell, CEO of Social Ventures Australia (SVA), told Pro Bono News the 2021 budget contains some welcome and overdue investments in the caring economy and in service sectors employing large number of women including in aged care, early learning, mental health and domestic and family violence services. But she said rather than taking the bold decisions to ensure all Australians can thrive, it reverts to pre-COVID policy settings which risks locking some Australians out of the recovery.

“Through the COVID-19 crisis and initial recovery phase, we have learned a lot about our society. These are lessons such as the life-changing effect of appropriate rates of income support on children and families, the positive impact of free childcare and the vital role charities play in supporting communities through dark days and delivering key services,” Riddell said.

 “The government has continued to invest in physical infrastructure that will benefit generations to come but in the social sector action has been focused on temporary fixes, not the transformative change Australia will need to ensure that everyone can thrive in this new world order.”

Australian Council of Social Service CEO Dr Cassandra Goldie said “this budget provides much needed funding to finally start fixing some of the gaping holes in our aged care, childcare, mental health, and domestic violence services”.

However she said they were worried about the government “clawing back hundreds of millions of dollars out of social security and employment services”, when there is a need to increase this funding.

People on low incomes left behind

ACOSS also highlighted that the government has given $20 billion dollars in personal tax cuts to people already in paid jobs for the next financial year, and tens of billions in business tax incentives. 

“But not a single cent more to people living in deep poverty, including women on low incomes,” Goldie said.

She said she was “deeply troubled” about a $671 million cut in income support for newly arrived migrants, and a $200 million cut to employment services.

There is a lack of detail in the budget papers around the $671 million, which the government expects to save over five years, just that “newly arrived residents” must wait four years for “most” welfare payments from 1 January 2022.

“Overall, the budget lifts essential services but leaves too many stranded. It does nothing to address the severe shortage of social housing or raise social security payments above the poverty line,” Goldie said.

Her comments were echoed by Anglicare Australia executive director Kasy Chambers, who said the budget showed Australia is recovering from the downturn – but that many Australians are being left out of the recovery.

“The government has recognised that it must lead the country to recovery. And because they’ve been willing to spend and invest, Australia has come out of the pandemic well,” Chambers said.

 “But even though there is good news in this budget for most Australians, those who were doing it tough before the pandemic are still being left out.”

Charities

While many charities may stand to benefit from an increase in funding in the care economy and the cause areas in which they work, the sector itself didn’t get a mention.

Despite employing more than one in 10 employees in Australia and providing vital services that are crucial for communities to recover and thrive, many of the measures included to help businesses will not be useful for charities.

Riddell told Pro Bono News that Australia’s charities have again been sidelined in the budget.

“Charities stepped up to support communities during bushfires, floods and the pandemic but did not rate a mention in the treasurer’s budget speech,” Riddell said.

“Measures to support businesses to invest including further asset write-offs, deregulation initiatives, and tax concessions to encourage innovations will be of little use to charities despite their crucial role in the economy and improving Australian’s wellbeing.

“We ask the government to revisit these business initiatives to ensure that charities can benefit from similar supports intended to drive innovation and productivity.”

Her comments come as analysis released by SVA and CSI this week showed that many charities were in a vulnerable financial situation leading into the pandemic and more than half are concerned about their ongoing viability. 

Housing

One of the other big gaps in the budget is in the area of affordable housing.

There were resources to help single parents and first home buyers purchase homes by lowering deposit requirements, and an expansion of the First Home Super Saver Scheme.

But while the government did reinstate funding for Equal Remuneration Order (ERO) supplementation for homelessness services – this was announced over the weekend and confirmed in the budget – there was nothing to address the shortage of low-cost, affordable housing and rising homelessness.

Mission Australia CEO, James Toomey cautioned that the government’s absence of leadership on measures needed at a national level to end homelessness and increase affordable housing will force more people into homelessness.

“The essential social infrastructure of social housing has been ignored yet again while the federal government continues to heavily invest in other infrastructure. Where is the leadership and innovation which this issue desperately requires?,” he asked. 

“The grim shortage of social housing and affordable rentals, high levels of housing stress, punitive rate of JobSeeker and other income support payments and a job market topped up with insecure, short term jobs is triggering a spike in financial distress, housing insecurity and homelessness.”

Toomey reiterated calls for a housing capital aggregator to enable large scale private investment in affordable housing to help end homelessness. 

With homelessness expected to rise with the 2021 Census statistics, he also urged the government to show the “necessary leadership” to end homelessness by 2030, including a specific target for youth homelessness and homelessness among older people.

Foreign aid

Another area missing out is foreign aid.

The Australian Council for International Development (ACFID) – Australia’s peak-body for international development NGOs – has expressed concern that against the backdrop of an Asia-Pacific at the epicentre of the pandemic, Australia’s development assistance is declining.

Responding to the budget, ACFID CEO, Marc Purcell said the Australian government did the right thing by front-loading its immediate regional response to COVID-19. But despite COVID-19 deaths rising alarmingly across the Asia-Pacific, Australian development assistance is now declining.

“The situation is fast evolving, but our budget response is not. Beyond the two-year package for India, there are no new, additional investments in this budget for tackling the pandemic,” Purcell said.

“DFAT is working around the clock on our response in the region, but we need a greater speed and scale of investment from the government.”

The budget does include a modest increase to $485.3 million for humanitarian assistance, but Sarah Burrows, head of policy and partnerships at ACFID, said this is a “far cry from Australia’s global fair share” and sees government walk back from its 2017 Foreign Policy White Paper commitment of $500 million a year.

Impact investing

There was also a missed opportunity to mobilise private capital.

The budget did include $13.9 million over four years from 2021-22 to establish an Early Stage Social Enterprise Foundation focused on providing capacity building and financial support for early stage social enterprises that improve the safety and economic security of Indigenous women.

However this was the only inclusion for impact investing. There was nothing to reflect the preliminary findings from the Social Impact Investing Taskforce.

Sabina Curatolo, acting chief executive officer of Impact Investing Australia, said: “This budget supports vulnerable Australians but has missed a significant opportunity to mobilise private capital to deliver greater positive social and environmental outcomes.”