Budget bites 2019

Expert insight into the biggest Budget issues this year

Chris Bonnor, Nicholas Biddle, Sue Olney, Liz Allen, Gaetan Burgio, Marianne Dickie, Kim Houghton, Kylie Bourne

PHOTO: AAP

Development, Economics and finance, Environment & energy, Government and governance, Trade and industry, National security, Science and technology, Social policy, Education, Health, Arts, culture & society | Australia, The World

5 April 2019

In this Policy Forum Rapid Round-up, experts give their thoughts on the policy of Australia’s 2019 Federal Budget.

On 2 April, the Morrison Government revealed its spending plans for the year ahead. And with Australia’s federal election expected to take place soon, many seem to be paying more attention this year than they might have in the past.

So, what are some policy spaces we should be keeping an eye on? Was there anything particularly noteworthy or was it all to be expected? Is the government setting the country up for success or driving it down a perilous path? Here’s what the experts had to say.

Much ado about … not much

“The fact that the government isn’t responsible for providing much on education each Budget seems to say a lot about the industry. Even the smallest initiative is given great significance, hopefully accompanied by a headline or two.

“The $453 million for pre-schools deserves a headline, even if it falls short of what is needed.  But why the one-off $20 million to help children sing and act? If evenly distributed, this will provide funding of around $3.00 per student – equal to one very small cake sold at the school fete.

“Yes, there is more for scholarships, vocational training, and skills development – amongst other things. Hopefully, though, it doesn’t overlap with funding provided by states. This is critical: the Commonwealth provides substantial recurrent funding to schools – but most states seem to respond by reducing their own contributions. It’s what’s certainly happening in the case of ‘Gonski’ funding.

“Consequently, Australian schools seem to exist in two parallel universes. The resulting problems are endemic in school provision and funding. We are not increasing support for students with the greatest needs, any more than we are increasing support for others.

“Initiatives in this year’s Budget, like much policy grandstanding, go some way towards providing solutions but equally act as a distraction from the very real problems we should be focussing on.”

A failure to support our Indigenous communities

“If the 2019 Federal Budget is, as widely reported, going to set the tone for the next Federal Election, then it doesn’t appear likely that the election is going to be fought on Aboriginal and Torres Strait Islander policy issues. At least not from an economic perspective.

“There are a number of important spending announcements, but these are mostly small and sprinkled throughout the Budget. Many were already announced alongside the most recent Closing the Gap report. Furthermore, the $158 billion tax cut at the centre of the Budget will provide little direct impact for the majority of Aboriginal and Torres Strait Islander peoples.

“Early childhood education, school investment and support, Indigenous-led research have all been stated as priorities of the Indigenous population. However, there are other priorities that Indigenous Australians have stated through numerous surveys and community consultations, as well as from Indigenous leaders in Parliament and beyond. Many of these are not included in the Budget.

“There are some measures in the 2019/20 Budget that would appear to be supported by evidence and likely to have a benefit for Indigenous Australians. However, many priorities are missed […] – this is not a Budget that supports Indigenous Australians.”

A missed opportunity for population policy

“There were many opportunities in this Budget for a government serious about population policy to take earnest action, unfortunately, this election Budget fell short of addressing the nation’s demographic challenges.

“Despite touted permanent migration cuts, Budget assumptions see net overseas migration estimates increase when compared to the 2018 Budget. This affirms concerns Australia will increasingly rely on migrants as a temporary class of citizenry, shirking reciprocal responsibilities.”

Every man for himself?

“Promises of tax cuts and a return to surplus in the Budget are of little consolation to unemployed people and people with permanent and significant disabilities in Australia.

“Two of the five major savings listed in the Budget are an expected $2.1 billion decrease in Social Security income support tied to sharing welfare recipient’s employment income data across departments, and $1.6 billion underspent on the National Disability Insurance Scheme, largely attributed to ‘the slower than expected transition of participants into the NDIS.’

“Issues of concern on these fronts are that errors in automated income reporting can push people into crisis, as we saw with robo-debt. And failure to address reasons for underspending on the NDIS in the face of desperate demand for services and support – which have been examined in-depth in a number of federal and state and territory government inquiries – may do irreparable harm to the scheme and those relying on it.

“While tax relief will be welcomed by ‘hard-working Australians‘, we shouldn’t lose sight of the fact that failing to help every Australian reach their full potential has costs for all of us that will outlast Budget and electoral cycles.”

A strong signal towards translational outcomes and research infrastructure 

“Budget 2019 is a mixed bag for science and technology. Importantly, the Budget 2019 outlines a strong commitment from the government to medical research.

“However, no additional and in fact a slight decline in investment from the government was outlined in the Budget document to research agencies, key for the development of new idea translational in the long-term to beneficial outcomes for Australia.

“Overall, and in line with previous Budgets, the government’s investment in science and technology and medical research provides a strong signal towards translational outcomes and research infrastructure. But it once again fails to further support blue-sky research, critical to fuel long-term research programs and innovation.”

Infrastrucutre and education are key in regional Australia

“The Regional Australia Institute (RAI) has welcomed the Federal Government’s Budget commitments announced by Treasurer Josh Frydenberg to improved regional road infrastructure, with an extra $1 billion for the Roads of Strategic Importance initiative.

“While the RAI welcomes the investment in hard infrastructure spending such as roads, attention is also required on soft infrastructure spending to make regional towns and cities more liveable and to help them attract people to and keep them in regional communities.

“With education a critical factor in the ability of regions to capitalise on projected job growth, the RAI also welcomes commitments to attract more students to regional universities, as well as strengthening vocational education in regional schools.

The Strengthening Higher Education in Regional Australia initiative will fund extra scholarships to regionally focused universities and support an extra 16 Regional Study Hubs. These are additional commitments to existing initiatives. The RAI looks forward to learning more details about this program as research shows 69 per cent of undergraduates who study at a regional university go onto work and stay in regional Australia.”

A stronger society is a multicultural one

“The role of the Department of Home Affairs includes the delivery of services that are meant to ‘strengthen the cohesiveness of Australian society’ through the migration program. Instead the government continues to use this portfolio as a policy wedge to drive discord and uphold its broader policy agenda.

“There is no clearer evidence of this than the opening and then proposed closure of Christmas Island facility in a matter of months. The expenditure for Regional Processing Arrangements-Christmas Island is $185.1 million allocated over the next two years. Most of this allocation is to manage the transfer of refugees and asylum seekers from Nauru and PNG to Christmas Island for medical treatment. This week in Senate Estimates we heard that only one person has been evacuated under the new legislation, highlighting the political and fiscal farce this expenditure really is.

“The strength of our multicultural society in the past was built through family migration and the nurturing of ethnic communities within the broader Australian culture. This commitment has been steadily eroded for the past twenty years.

“It is clear that the commitment to strengthen cohesiveness of Australian society does not include families of migrants. The cut to immigration numbers once again severely impacts on family reunion with a reduction of close to 10,000 family visas. The government considers that is a privilege for an Australian citizen or resident to have their husband, wife or partner live with them in Australia. So much so that the purposeful slowdown in processing of partner visas has resulted in 80,539 people waiting in the queue. Yet the exorbitant visa fees will increase yet again and the government will continue to take the application fees from people who must then wait years for the service they paid for.

“It is shameful that the government has not used this Budget to increase their ability to process visa and citizenship applications. The failure to do so demonstrates their lack of commitment to migration, migrants, and Australian citizens.

“If we look to regional skilled visas under the New Regional Visas Population Package, it is important to note that once again there is no commitment to building multicultural Australia or to the welfare of the migrants, they wish to entice on this visa.

“Instead migrants will be used to plug gaps in our work force and offered a temporary visa. Attracting skilled migrants to Australia with the offer of a temporary visa that has specific conditions can result in failure and heartache for many families.

“Migrants on temporary visas will continue to pay international fees for their children’s schooling, and their health costs. Yet the conditions of the visa can change, and they find that after 5 or 10 years of input into the Australian community and the economy they are no longer eligible for permanent residency.”

In need of a carbon price

“The $2 billion for the Climate Solutions Fund has now been Budgeted to extend over 15 years instead of 10. This is not much money for what is the central pillar of the Government’s climate policy.

“The Budget balance would be in a better position if Australia had retained its former carbon price, instead of scrapping it and moving to a subsidy-based approach. Emissions would be lower, and we would be in a much better position to move forward with emissions reductions over coming years.”

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