Federal budgets are a complex balancing act. There are multiple competing needs – especially on a new government – between various groups expecting a return on their political investment, diverse electorates with competing projects and the often overlooked need for a new treasurer to make their mark.
The Albanese government’s first full federal budget was no different in this respect, but it faced additional challenges, ranging from a cost-of-living crisis driven by rising inflation and stagnant wages to a substantial, if manageable debt inherited from the previous government’s pandemic response.
While these constraints have framed the treasurer’s approach to economic management, there are some large, nation-building projects and investments. The national net-zero authority, the national reconstruction fund, funding for the voice referendum and a $4bn surplus signal that the government is trying to balance the competing priorities of their agenda with the economic context they are operating in.
However, while these big-picture investments bode well for Australia’s economic future, the focus for most of us remains on our hip pockets; so what is the government doing to ease the cost-of-living crisis?
The good news is there are investments that will go some way to relieving pressure on some of the most vulnerable, starting with single parents.
As the government flagged ahead of the budget, they have scrapped the controversial ParentsNext scheme that forced single parents into the burn and churn of the punitive private employment service system, and have lifted the cut-off age so the single parents will continue to receive payments until their youngest child turns 14.
After these changes take effect later in the year, this will give single parents an extra $176.90 a fortnight – that’s $27,596.40 more in parenting payments between the ages of eight and 14 compared with the punitive and insecure jobseeker payment.
Similarly, older jobseekers will benefit from a lowering of the threshold age for the higher daily rate of jobseeker, from 60 to 55. This reform puts $52 a fortnight into the pockets of 220,000 older, long-term unemployed workers.
There was early speculation there would be no increase to the base rate for income support, however the treasurer announced a $40 increase to the fortnightly payment for jobseeker, Austudy and Youth Allowance. While it is welcome to see any increase in the base rate, this is a very modest amount that disappointed many. However, the government’s response to the inquiry into Workforce Australia is due to hand down its final report in September and offers an opportunity for deeper reform.
Additionally, commonwealth rent assistance will increase by 15%, which is expected to benefit 1.1 million low-income households. The government also announced a suite of reforms to increase housing supply at the lower end of the market, with new incentives for build-to-rent schemes and an additional $7.5bn investment for community housing providers to expand their social and affordable housing.
There were several cost-of-living reforms that make a dent in the bottom line for millions of Australians, in particular in our electrical bills and childcare costs.
In the energy space, on top of the recently passed cap on gas prices, the government has provided up to $500 for pensioners, people on lower incomes and renters to help pay for energy bills as well as a package of nearly $3bn to provide energy-efficiency upgrades in social housing and create a low-interest loan for energy-saving home upgrades in the private market to reduce power bills over the long term.
As for healthcare, the government has followed through with its announcement that from 1 September, over 300 common medications will be dispensable in two months supply instead of one, without a price increase.
The treasurer followed up this announcement with a $3.5bn investment to significantly increase the bulk-billing incentive for GPs to treat pensioners, children under 16 and other concession cardholders.
Alongside these direct payments and incentives, there are a number of indirect measures that will increase the stability of lower-income families.
There are significant increases to the wages and security of care economy workers. The government has committed $72.4m to increase the wages and skilled development of the early childhood education workforce, and a 15% wage increase for aged care workers on the award minimum wage. Additionally, there are job creation investments, with billions of dollars being invested in industrial development and diversification.
Ultimately, they’ve managed to make a start on investing in the social wage while maintaining a budget surplus, albeit a small one, for the first time in nearly 15 years.
But what’s missing? Most notably, there is no reference to public housing. While there are some reforms that will hopefully increase the housing supply, nothing increases it like directly building more housing units.
Unwinding a three-decade-long consensus on neoliberalism, which has shifted the onus of responsibility on to the individual and brutalised the poor, isn’t easy. This budget was never going to be able to undo the harms of this period, but it’s a cautious step away from that agenda.
It could be seen as the first step on a progressive path to prosperity and a modest change in direction from a new government.
• Shirley Jackson is the director of the Centre for New Industry at Per Capita, a research centre dedicated to economic diversification, decarbonisation and democratisation
