The Federal Budget is not what it's cracked up to be
Thursday 20 May 2021
This Federal Budget has fallen woefully short of what the Australian people need, while the Morrison Government continues to rack up an unprecedented level of debt.
After years of decline, continued wage stagnation is forecast, when we are already at our lowest annual wages growth in history. This structural shift has occurred due to increasing levels of insecure work and a reduction in workers’ bargaining power.
Low wage growth, gender inequity and insecure, unreliable work do not happen by accident; they result from deliberate policy decisions taken by this Government, which the budget has reinforced.
We are still experiencing an economic ‘sugar hit’ after a short period of household savings last year and substantial COVID stimulus measures. Over 14% of the expenditure in this budget will come from raising debt. There is little in the way of structural reforms in the pipeline to improve equality or support consumer spending once the sugar hit wears off. Consumer spending drives 60% of annual GDP. A trillion-dollar debt level by 2025, without it seems, a coherent plan to drive economic activity by job creation, wages growth and income support, is extraordinary. Meanwhile:
- Company profits are through the roof over the past 12 months (source ABC).
- Australia's 31 billionaires grew their wealth by over $85 billion since COVID-19 hit.
- Companies can access $17.9 billion of tax offsets (over the forward estimates) – accessible for companies with up to $5 billion in annual turnover.
- Over $2 billion in subsidies is promised to the major fuel refineries.
- There is no vision or plan to transition Australia to a low carbon economy.
Aged Care has been allowed to decline in quality for years, leading to the recent Royal Commission. The funding package in this budget won't change the ingrained issues set out in the findings of the Royal Commission but hopefully it will lead to some improvements. This budget basically starts to put money back into the sector that they had previously cut out, but still without the transparency and oversight needed of where the money will go. There are no plans to improve wages or commit to permanent jobs in the aged care sector, and the important role of Allied Health was completely overlooked.
We are pleased the Government has started to show more recognition of the importance of mental health and wellbeing in Australia, but unfortunately, it does not go far enough.
As evident over years of underfunding, the mental health workforce is in dire need of more resources, especially in Australia's rural and regional areas. Only $202 million of the $2.3 billion has been allocated to 'mental health workforce and governance measures', which is less than 9% of the overall allocated budget. The bulk of the money is allocated for counselling services rather than for acute clinical and psychiatric services that many vulnerable Australians are dependent on. Unfortunately, the initial assessment is that this budget will do little to alleviate the pressure that the mental health workforce is currently struggling under.
Scrapping the $450 a month to pay for compulsory super is good news for health workers. Unions have been campaigning to remove this threshold for years, and the Government should have lifted it a long time ago. This threshold disproportionately affects women who are often employed on low hours and insecure contracts (and often work with different employers to make up their weekly wage). This is a small step towards closing the super pay gap and is very welcome.