ACOSS response to measures in the Federal Budget

In addition to last night’s response, ACOSS has reviewed the budget papers in more detail to assess how last night’s budget will work to reduce poverty and inequality, boost employment, deliver the revenue base we need to fund essential services, support the community sector and deliver fair, fast and inclusive action on climate change. We will continue to analyse the budget as more information comes to hand.

There are budget measures that ACOSS welcomes, that need further work and that ACOSS believe are missing in action.

Underpinning our analysis is the effect of inadequate income supports for people on the lowest incomes, demonstrated by the below:

Figure 1: JobSeeker Payment rate over time, including $20pw increase announced in 2023 budget ($2023)

Figure 2: Scenarios for different payments and households

WELCOME

Welcome measures to support people on low incomes

  • A pay rise of 15% for approximately 250,000 aged-care workers ($11B over five years).
  • Extending Parenting Payment Single to 57,000 single parents whose youngest child is aged up to 14 ($1.9B over 5 years).
  • The abolition of the punitive ParentsNext program and immediate cessation of mutual obligations of parents subjected to ParentsNext ($110M pa to be repurposed for redesigned voluntary program in 2024-2025).
  • Funding for the Economic Inclusion Advisory Committee ($8.7M over 4 years, with $2.2m per year ongoing).

 Funding for essential services

  • Changes to the indexation formula for Commonwealth programs and services ($4B over 4 years).
  • Further funding for the National Disability Insurance Scheme to support participant outcomes and the operation of the scheme ($732.9M over 4 years).
  • Funding to support the skills and training of 80,000 educators in the early childhood education and care sector ($72.4M over 5 years).
  • Investment in initiatives to address entrenched disadvantage in key communities through place-based approaches and local partnerships ($199.8M over 6 years).
  • Creation of an Evaluation Unit within Treasury to examine policies and programs across government. ($10M over 4 years).

Employment measures

  • A positive shift towards embedding social procurement models to give disadvantaged people a chance to get industry qualifications with the Skills Guarantee ($8.6M over 4years).
  • Progress towards safeguarding the workplace rights of people with disabilities in supported employment to support the evolution of the supported employment sector, including the provision of $11.7 million to to establish a targeted disability employment advocacy service and information program ($57M over 4 years).
  • The beginning of trials of locally designed models to Workforce Australia in Broome and repurposing local jobs funding to create opportunities in communities affected by Net Zero restructuring ($5.6M over 5 years).
  • Y Careers service to help connect young people with jobs in caring roles ($15.2M over 2 years).

Boosting revenue

  • The tax rate applied to future earnings of superannuation balances above $3m will be 30% from 1 July 2026 ($3.2B in 2025-26, increasing to $6.25B in 2026-27).
  • Superannuation to be paid on employee’s payday rather than quarterly from 1 July 2026 (Increase receipts by $835M and decrease payments by $285M in 2026).
  • Increase to tobacco taxes as a welcome source of revenue (but must be supports for people affected on the lowest incomes) ($3.3B over 5 years).
  • Multinational tax reform implementing a global minimum tax and domestic minimum tax based on OECD Global Anti-Base Erosion Model Rules ($370M increase in receipts; $111M increase in payments over 5 years).

Action on climate and energy

  • Funding to support electrification and energy efficiency for social housing is a welcome initial investment. More funds will be needed to reach more people on low-income in social housing, private rental and owner occupier ($300M over 4 years).
  • $1 billion equity injection to the Clean Energy Finance Corporation and lowering its rate of return, to provide low-interest finance to support electrification and energy efficiency home retrofits ($1B equity)
  • Funding to expand and accelerate the development of Nationwide House Energy Rating Scheme (NATHERs) for existing homes and the Greenhouse and Energy Minimum Standards (appliance efficiency) rating ($36.7M over 4 years and $2.1 m per year ongoing)
  • A Net Zero Authority is a welcome investment to coordinate transition of impacted workers and communities to a clean economy ($83.2M over 4 years).
  • New initiatives to accelerate renewable energy and decarbonisation, including, capacity investment scheme for clean energy and storage, the Hydrogen Headstart program to accelerate clean energy exports, support decarbonisation existing industries ($4.4B over 4 years).
  • Welcome investment in developing Australia’s first National Climate Risk Assessment and a National Adaptation Plan ($28M over 2 years).

Health

  • Tripling of bulk billing incentive payments for general practitioners to increase bulk billing rates for children aged under 16, pensioners and other concession card holders ($3.5B over 5 years).
  • Doubling of medication available for the price of one script ($1.2B over 5 years).
  • Health reform to move towards a mixed model of care that will better support patients with chronic and complex health needs.  These changes are welcome and will make health care more accessible, more affordable and more responsive to patients and the community, particularly people on the lowest incomes.

First Nations communities

  • Funding to close the gap on health and wellbeing outcomes for Aboriginal and Torres Strait Islander people and improved outcomes in aged care ($363.1M over 4 years from 2023-24).
  • Funding to deliver the referendum to recognise Aboriginal and Torres Strait peoples in the Constitution through a Voice to Parliament ($364.6M over 3 years from 2022–23).

A START BUT NEED TO DO MORE

  • Increasing JobSeeker, Youth Allowance, Austudy, Abstudy and Special Benefit by $20 a week is better than no real increase but is well below the $181 per week (Jobseeker) increase ACOSS calls for ($4.9B over 5 years). The increase for people aged 55 to 60 who have been unemployed for 9 months or more will be $46 a week. While better than $20, this will still leave people without enough to cover basic costs. All these payments, along with parenting payments, should be raised to at least pension level
  • Energy bill relief fund will provide between $350 and $500 rebate on electricity bills for 5.5 million eligible households, providing some immediate welcome relief on energy bills. Disappointing that this packaged wasn’t better targeted to provide the most relief to people on the lowest incomes ($1.5B over 2 years).
  • Rent Assistance will be increased in real terms for the first time in over 30 years but the 15% rise will still leave people on JobSeeker and Youth Allowance renting privately in housing stress because these payments have fallen so far behind basic costs ($2.7B over five years).
  • Reform of the Petroleum Resource Rent Tax for oil and gas producers will raise an additional $600 million a year, but this is only a fraction of what could be raised. The Government should go further and apply a 10% royalty to raise an additional $8 billion a year ($2.4B over 4 years).
  • Measures to increase social and affordable housing in the longer term, by providing lower cost finance to social housing providers such as an increase NHFIC’s liability cap from $5.5 billion to $7.5 billion from 1 July 2023. Further investment is needed to deliver a 10 year, 25,000 dwelling per year pipeline of social housing investment. More immediate support is needed for people who are homeless and at risk of homelessness due to rapidly increasing rents and low vacancies.
  • Expansion of criteria for the Home Guarantee Scheme is sensible, but more targeted housing support is urgently needed.
  • The build to rent incentives will reduce pressure on the rental market and will give many people housing security. However, the dwellings are most likely to target middle income earners, so are likely to be largely inaccessible to people who have low incomes, and they will not help people who are homeless and need more immediate relief ($34M over 5 years).
  • More proactive initiatives to provide support for the people who have been missing out on jobs such as people with disabilities, and mature aged people are still needed.
  • Initiatives to decarbonise the transport sector, including developing fuel efficiency standards and decarbonisation strategy ($20.9M over 5 years). Targeted funds and measures are needed to help people on low-income access electric vehicles and other clean affordable transport options.
  • Additional $405M funding for disaster response, recovery and resilience, including additional mental health services (7.2M over 2 years) and better disaster forecasting ($236M over 10 years for flood warning infrastructure) and better communications. More funds are needed to better meet needs of people including increasing disaster payments and disaster allowance, and the community sector who supports them.
  • Funding for the Family and Domestic and Sexual Violence Responses National Partnership Agreement ($159M over 2 years). Requires substantial increase and longer-term funding.

MISSING IN ACTION

This budget has missed the opportunity to:

  • Cancel the scheduled stage three tax cuts set to cost $20 billion a year.
  • Raise revenue and incentivise healthy behaviour change by increasing taxes on sugary drinks and wine.
  • Align tax policy with climate goals by not phasing out the $9.4B a year fuel tax credit, or fossil fuel subsidies.
  • Provide energy debt relief to thousands of people holding average debt of $1,846.
  • Put in place a national framework to manage an equitable and inclusive energy transition for people experiencing poverty and disadvantage, as per recommendation 19 in economic inclusion report.
  • Provide necessary improvements to accessibility and affordability of ECEC for low-income families including abolishing the Activity Test for parents and families seeking the Childcare Subsidy.
  • Provide proper funding for advocacy and peak organisations to inform public policy and service design.
  • Improve wages across entire care and community sector workforce.
  • Provide adequate, additional investment in emergency and food relief services to assist people on low incomes.