May 12, 2021

Is weathering the storm enough? Is this the society we aspire to?

The Centre for Social Impact's CEO, Professor Kristy Muir, reflects on the 2021 Federal Budget.

There was a lot of welcome news for the Australian economy in the Federal Government’s 2021-22 Budget announcement. 

We once again earned our moniker of the ‘lucky country’, especially regarding our economic, health, and social recovery from a pandemic that continues to affect the globe. But of course, it’s not all ‘luck’. We witnessed the impressive power of what government policy and intervention can achieve. For example, we saw:

  • A drop in rough sleeping (e.g. between Feb 2020 and Feb 2021 Sydney Street Count numbers went from 505 to 288);
  • Improvement in housing stability with moratoriums on evictions;
  • Social security increases which lifted people above the poverty line and enabled them to do the things many of us take for granted: eat three meals a day, buy more nutritious food for their children, pay debts, buy warm clothes and basics, like toiletries;
  • Unemployment being curtailed by supporting 1.63m workers on JobKeeper (as at October 2020; with 1.54m still on JobKeeper by Dec 2020);
  • Support for charities and other affected industries; and
  • A public health system rally to keep us as safe and well as possible. 

This is the definition of resilience: how we adapt and cope in adverse circumstances through internal and external supports. And we certainly adapted and ‘bounced’. Collectively, we weathered the storm and avoided falling off the cliff edge. 

The “cliff edge” analogy has been used a lot over the last year. There was great fear about the impending uncertainty of falling off the cliff. The reality is that some people had already fallen off the cliff into stormy seas, even before the pandemic began.

Who and how many more will fall off that cliff now that JobKeeper, JobSeeker and other supplements and supports have stopped is not yet known. 

The recovery data suggests that the Australian economy “falling off the cliff edge” is far less likely than previously feared. And the government’s strong focus and aspirational target to bring unemployment rates to below 5% (with billions being invested into “creating jobs and rebuilding our economy”) is impressive and critically important.

Its $17.7bn funding response to the recommendations of the Royal Commission into Aged Care Quality & Safety over the next 5 years, along with its increase in support to veterans, investment in childcare, investment in mental health and telehealth, are also all very positive and important for society.

But there are five reasons I’m concerned and disappointed. 

Before COVID, before the natural disasters, before the Black Lives Matter movement, we already had people who had fallen over the cliff into stormy seas without life rafts (1 in 200 homeless on any given night; little social progress despite almost three decades of GDP growth; stagnant wage growth; 2 in 5 families living in poverty have at least one working parent).

We provided life rafts to (some of) them during COVID, but it wasn’t enough to get them to shore and enable them to climb back up the cliff and hang on. And from 28 March, the life rafts have deflated and we’ve missed an opportunity to make fundamental long-lasting societal changes. We have failed to:

  1. Improve economic and social outcomes by raising the social security rate: Groups from across society, industries and political perspectives (including the BCA) have long called for an increase in social security for people who need it and for the benefit to the economy overall. We saw an increase during COVID, but as of 1 April, social security rates were dropped by $50 in real terms. The current $44 a day is below the poverty rate and well below half the minimum wage.

  2. Help increase affordable, stable and secure housing: Having somewhere safe, affordable, stable and secure to live is well established in evidence to be the foundations of other life outcomes. Before COVID we were already working off high rates of homelessness and housing affordability issues. We’re now seeing increasing rent pressures and a return to housing financial stress. The Government is proposing to provide $782.1 million over four years from 2021‑22 in the areas of “home ownership, support jobs in the residential construction sector and enhance housing data”. Of the $782.1m, almost all of it ($774.8m) is for the extension of the HomeBuilder program. There is no adequate social or affordable housing response.

  3. Improve digital inclusion as an enabler for full participation: The Digital Economy Strategy is important, but it’s only relevant for people who are digitally included. At the last count, around 2.6m Australians did not use the internet and the digital exclusion index demonstrates ongoing challenges. How do they access the digital economy?

  4. Address unemployment from a holistic perspective: The emphasis on job creation will only work if there are adequate supports in place that allow people to gain and maintain jobs - such as community connections, supports, affordable and appropriate housing, responsive and accessible healthcare, digital inclusion and adequate social security. We have a serious challenge in ensuring that employment solutions don’t leave people behind, especially the longer term unemployed. We also have a significant numbers challenge: The latest ABS Labour Force figures in March 2021 (before JobKeeper ended) reported 778,100 people unemployed (5.6%; youth unemployment at 11.8%). Those 778,000 people were competing for only 288,700 job vacancies (as at Feb 2021). If we add the over 1m people who are underemployed (7.9%; who have a job but want and are available for more work) and the 1.5m who came off JobKeeper on 1 April to the existing JobSeeker, simple maths will tell you that there are a lot of people competing for a very small number of vacancies.

  5. Support the industries that make Australia stronger, fairer and a great place to live: There was some really important recognition and support for industries and businesses who have been and continue to be affected by COVID (e.g. tourism, aviation and asset write-off tax breaks) and some redressing of issues that are at the heart of public concern - like safety of women and aged care. But missing amongst these groups are some that are critical for our longer-term recovery and creating the kind of society many want to live in.

Here are urgent issues the public have been loudly calling for that have been a missed opportunity in this budget:

  • Climate change and the environment
  • Black Lives Matter movement and closing the gap / funding for First Nations
  • The importance of migration and migrants to Australia’s history, present and future (e.g. support for people and industries that rely on international workers, migration and students and foreign aid).
  • Our for-purpose organisations who during COVID had increased demands and decreased revenue and who are critical to build the society we want and need for a brighter, cleaner and fairer future (see CSI & SVA’s Partners in Recovery series)

The emphasis on job creation, addressing aged care quality and safety and women’s safety are strongly welcomed. But we have missed the opportunity for some fundamental shifts to society.

During 2020, as a country, we found ourselves teetering on the cliff edge, but some people had already fallen off it and were adrift at sea. We weathered the storm and (proudly) provided life rafts to those who most needed them. But the life rafts have deflated and we’ve missed a real opportunity to provide the ropes and levers to shift society in a way that will enable people to climb back up the cliff edge.

And, I fear, that there will be more who will fall off it in the months to come. We have missed an opportunity to find and use the moment to not just weather the storm, but redefine and rechart our future.

> Read CSI’s full response to the budget


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