May 16, 2017

CEO Update - May 2017

Fairness, security, opportunity? Reflections on the Federal Government Budget 2017

In his 2017 budget speech Treasurer Scott Morrison explained that “This Budget is about making the right choices to secure the better days ahead”. He emphasised that the government’s decisions were “based on the principles of fairness, security and opportunity”. 

But is this budget fair, does it help increase security and provide opportunities for our most vulnerable in society?

Having access to safe, affordable, secure housing, an adequate standard of living, good health, education and employment, social inclusion and the right to services, supports and care that recognise need and uphold dignity and respect, are aspects of life that we all need, value and aspire to. And yet access to these fundamental features of life is still a struggle for many people in Australia. As the Centre for Social Impact's Australia’s Social Pulse dashboards consistently show: people who live in a disadvantaged area, who have a disability, a mental health problem, or who are of Aboriginal or Torres Strait Islander backgrounds, are consistently at higher risk of poorer social and economic outcomes than their counterparts. 

This 2017 budget has gone some way to begin to redress some of Australia’s social inequalities. Importantly, there has been a concerted effort to tackle Australia’s entrenched housing affordability and homelessness problems. The budget includes changes addressing housing supply through establishing a National Housing Finance and Investment Corporation to encourage private investment in affordable housing and to assist affordable housing providers to increase their stock via cheaper and longer-term finance. The government has also proposed $1 billion for infrastructure funding, land release, tax incentives for individuals, new rules for Management Investment Trusts and a levy for foreign investors who keep housing empty for 6 months or more. Coupled with this, the government is tackling homelessness through $375m of funding, a new National Housing and Homelessness Agreement and $10.2m towards social impact investments addressing homelessness for Australia’s young people.

While these measures tackle many levers, without addressing negative gearing, time and measurement will tell whether these initiatives and the implementation of them are enough to make housing more affordable, decrease housing stress, significantly drop the 200,000 waitlist for social housing and the shift the 1 in 100 young people and 1 in 200 Australians who are homeless on any given night into safe, stable accommodation. 

There were also some other wins with the government attempting to decrease inequality in education (committing to $18.6b for Gonski 2.0); to support people with disabilities (through the full funding of the NDIS); to support the physical and mental health of Australians (via Medicare and a range of mental health investments) and to help close the gap for Indigenous Australians; and support for victims of child sexual abuse. 

Although there were some measures focusing on ‘Jobs & growth’, people who are unemployed or underemployed (have some work but are looking for more) were losers in this budget. Mutual obligation rules have been tightened: for example 30-49-year-olds receiving Newstart (to become JobSeeker payments in the future) will be required to spend 50 hours (up from 30) a fortnight on employment related activities. This includes looking for work, working part-time, volunteering, government programs and/or study. People 50-55 can no longer meet their mutual obligation through volunteering alone and people 60 and over (before age pension) will have to commit to at least 10 hours a fortnight of mutual obligation activities (volunteering is allowed).

These ‘activities’ are all productive uses of people’s time that may help with future employability. The big challenge, however, is that these measures focus on ‘fixing’ individuals who are seeking employment, not on creating more jobs. And the stark reality is that in February 2017, there were almost 2 million job seekers across Australia (1,098,500 underemployed people and 743,700 unemployed) and only 186,400 job vacancies. That means every job seeker only has a 1 in 10 chance of getting a job.

For our young people, 1 in 3 of whom are unemployed or underemployed, this is even more challenging because they’re competing with older job seekers with more experience, training and skills. The $840.3m Youth Employment Package in the budget is focused on giving young people the ‘employability skills that employers want’. While skills are critical, without targeted jobs for young people, it is hard to see the youth un/underemployment rate decreasing.

Young people not only face increased mutual obligation requirements, they also face stigmatisation through suggested drug and alcohol testing. Interestingly, the focus on veteran’s mental health includes funding and support for drug and alcohol abuse. As it rightly should, the federal government is recognising the relationship between drug and alcohol abuse and trauma for our veterans who served our country. The link between trauma and substance use and mental health and substance use among young people has been well established. So shouldn’t we also extend this respect and support to our young people?

Fairness is about “impartial or just treatment or behaviour without favouritism or discrimination”. I’m not sure the budget passes this fairness test when it comes to young people; people who are seeking work who face low chances of finding work; people who are receiving unemployment payments which have not increased in real terms in twenty-years; or for the 13.3% of Australians and 731,300 children living in poverty. Further, the more extreme mutual obligation requirements will further marginalise and stigmatise an already very vulnerable group of people.

There are some very good initiatives in this budget that if implemented well should help to increase housing stability, decrease inequalities in our education system, support our mental and physical health, and support people and their families with disabilities to meet their needs and goals. There are also some sound investments in new funding models through a $30.4m commitment to social impact investment over the next decade, which has promise. Effective implementation will be key in all of these areas.

But is this budget fair, does it help increase security and provide opportunities for our most vulnerable in society? I don’t think it goes far enough to support our most marginalised or to help to decrease the growing gaps in social inequality.


Professor Kristy Muir, CEO

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