Flawed beauty in back-to-the-wall Budget

Posted 14 May 2013 9:17am

Paul O'Callaghan, Executive Director, CSSA

(As published on Eureka Street)

With Labor's back to the wall due to fiscal pressure and an election only four months away, last night's Federal Budget represented this Government's last statement of its values and priorities.

We saw in evidence its values and priorities reflected in a ten year funding commitment to DisabilityCare and improved equity in school funding based on need. Similarly the oral health care commitment in previous budgets looks set to improve access to affordable dental care for many low income families. Subject to how well they are implemented, these will improve the quality of life for millions of Australians.

We also saw an effort to improve revenue at a time when tax receipts are down by $20 billion. This includes closing some corporate tax loopholes and other tax arrangements. At the same time, much bolder steps will be needed in coming years in order to address the inexorable growth in health care funding, as well as infrastructure, education, welfare and a range of costs related to an ageing community.

Like a beautiful gem with a crack through the middle, this Budget also showed another side of the much touted Labor values and priorities.

There was only disappointment for the 680,000 unemployed Australians who might have anticipated that, after six years in office, this Government would finally acknowledge their exceptionally tough lives and offer at least some increase to the Newstart Allowance. The Senate Inquiry into allowances, including Newstart, last year was presented with overwhelming evidence of how harsh life is living on $35 a day.

Among many sources of evidence, the National Centre for Economic and Social Modelling found that households dependent on Newstart for their income were required to go into debt to be able to take care of their families. Yet despite there having been no real increase in that allowance level for nearly 20 years, and with the business community, economists and welfare groups urging the Government to get serious, Labor chose other priorities.

The modest offer to allow Newstart recipients to earn up to an extra $19 per week before losing benefits will be of some help to the 20 per cent who currently have access to employment. The 530,000 others will have to wait for a future Federal Budget. Similarly, the poorest Australian families are the ones to bear the brunt of not proceeding with Family Tax Benefit Part A, and of the large reduction in the value of the Baby Bonus.

The Catholic Social Services Australia network of agencies and those of other Church providers have been experiencing an increase in demand for our services. Families under extreme financial pressure often seek assistance through our networks. This is also the case for those asylum seekers on bridging visas who have been effectively shifted into poverty by the Government and banned from gaining paid work.

The Treasurer has emphasised his belief that Labor's values and priorities are reflected in this Budget. He is keen to help the battler. Yet there is a sharp dissonance between the Government's promotion of a 'fair go' through big reforms and its evident disinterest in so many citizens whose daily financial struggles are profound.  

We have regularly heard ministers respond to questions about Newstart by saying that, rather than increase the allowance, the best outcome is for unemployed people to get a job. Getting a job is normally the best outcome, but one third of people on Newstart have been on it for over two years and more than half have languished on this inadequate payment for over one year. Newstart was only ever intended to be a short term measure.

Notwithstanding the benefit of the big reform measures, our community is diminished by continuing to treat some of our most vulnerable households as a secondary consideration. We should judge ourselves by how we treat the most vulnerable amongst us.

A key challenge for Labor and the Coalition is to provide leadership on the revenue generation side of the ledger, including by identifying larger measures than hitherto, such as reforming our skewed superannuation tax concessions system, so that health, education, infrastructure and social programs can be adequately funded.

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