The 2019 Budget verdict – Part 2

| April 4, 2019

In part two of our coverage of the 2019 Federal budget, University of Melbourne experts assess the implications for welfare recipients, climate change, refugees, Indigenous Australia, education and research.

Welfare: Associate Professor Irma Mooi-Reci, Head of Sociology, Social Policy and Social Theory, School of Social and Political Sciences

Low and middle-income earners are considered among the biggest winners of the Budget. Tax relief is expected to ease the cost of living making it possible for singles and dual-income families to buy more material goods, engage in more activities, and make investments.

Despite this positive news, no measures were announced to raise the level of support for jobless households, including households where both parents aren’t in paid employment. In Australia an estimated 11.6 percent of families with dependent children had no employed parent in 2016. Further, 12.6 per cent of all children under 15 were living in a jobless family.

The budget plans don’t include measures that tackle unemployment and welfare issues. There are no plans to stimulate job activation programs for the unemployed. Furthermore, there are no plans to increase the level of support in the New Start Allowance or Youth Allowance, which are central to selecting, sorting and finding durable re-employment.

Evidence suggests that jobless households with children, where at least one parent is unemployed or in welfare, experience lower levels of educational attainment, and have a greater likelihood of experiencing income poverty and welfare reliance in adulthood.

Finally, the level of support for pensioners and others will be raised to cover their energy bills. However, if this is a one-off payment it is unclear how pensioners and other groups would be supported to bear these costs in the future.

Energy and climate: Associate Professor Dave Byrne, Deputy Director, Centre for Market Design, Faculty of Business and Economics

There wasn’t a lot of talk about energy and climate in the Treasurer’s budget speech.

If there was any mention of energy and climate, it related to new emergency response funding for regional Australia in responding to drought and flood.

But the bottom line is that Australia isn’t on track to meet its Paris Climate commitment of a 26 to 28 per cent reduction in emissions off 2005 levels. We are projected to achieve a seven per cent reduction, and the budget on Tuesday night offered little to suggest we can change course.

The A$2 billion pre-budget investment in a Climate Solutions Package, which will expand upon the Emissions Reduction Fund, is what the Coalition is proposing to fight climate change with. But the evidence from the aggregate impact of the ERF on emissions suggests it won’t put us on a trajectory to meet our Paris targets.

Labor, in stark contrast, has outlined an extensive climate policy plan that involved various big-ticket policy proposals, including implementing the Coalition’s National Energy Guarantee, an increased emissions reduction target of 45 per cent off of 2005 levels, credits for industry for reducing their carbon footprint (and penalising those who over-pollute relative to their baselines), having half of new car sales being electric vehicles by 2030, and investments to modernise the energy grid.

All of this set-ups climate policy as being a central battle ground between the Coalition and Labor in the upcoming federal election.

For the voter, the divide between the parties when it comes to Coalition’s focus on tax and surpluses, and Labor’s focus on climate policy, might come down to this: would you rather leave your children with a smaller federal debt or a worldwide climate crisis.

Refugees: Dr Claire Loughnan, Criminologist, School of Social and Political Sciences.

In its Federal budget, the government has outlined the cost of re-opening (and then reportedly closing) the Christmas Island detention centre, giving effect to the legal transfer of refugees and asylum seekers for the temporary purpose of medical or psychiatric assessment or treatment.

The costs include A$178.9 million to manage the transfers from Nauru and Papua New Guinea, A$3.2 million to pay for more Australian Federal Police on Christmas Island, and A$3 million to strengthen the media operations of Operation Sovereign Borders.

A further A$8 million has been allocated toward the cost of an Independent Health Advice Panel to advise on the medical transfer of refugees from PNG and Nauru.

This as the government is set to close the detention centre by 1 July 2019. The budget forecasts a cost of A$23.7 million next financial year – if the centre closes. And at this stage, it’s not known whether any refugees or asylum seekers have been transferred there.

Despite a reduction in cost, we still see a government spending money on a system which itself produces the need for spending on medical care because of the harm it causes. Moreover, sending detainees to Christmas Island is a futile use of resources given that it lacks capacity to provide this care.

Keeping refugees in closed detention is expensive, as shown by figures published in March 2019 by the Kaldor Centre and compiled by the Refugee Council of Australia. In the last financial year, the cost of keeping someone in offshore detention was more than A$573,000 a year, and the cost for detention in Australia was more than A$346,000 a year.

A report published by UNICEF in 2016 indicated that ending even ‘open detention’ would save the Australian Government as much as A$20 billion by 2020.

The transfer of refugees and asylum seekers to the Christmas Island detention centre, and the costs associated with it, reveal the lengths which the Australian Government will go to in order to deny meaningful protection to refugees and neglect its responsibilities under the Refugee Convention.

Indigenous health: Todd Fernando, PhD Candidate, Melbourne School of Population and Global Health

The 2019-20 Federal Budget, much like previous Federal budgets, has fallen short of strengthening positive Indigenous outcomes for the health and wellbeing of Indigenous Australians.

The budget does include A$160 million for Indigenous health research. And the budget builds on the existing A$5.2 billion Indigenous Advancement Strategy. But budget initiatives for Indigenous Australians remain an awkward fixture for a Morrison Government.

For example, the investment of A$461 million towards youth mental health and suicide is an honourable action for supporting vulnerable Australians. The dishonour is that only A$5 million (over four years) go directly toward tackling the national crisis of Indigenous youth suicide.

It remains unclear how federal investments into Headspace will deliver much-needed outcomes for Indigenous youth mental health. Perhaps one of the 30 new Headspace centres will be built in a remote community.

The Morrison Government has responded to the soaring rates of family violence with a A$35 million package allocated to address the specific needs of Aboriginal and Torres Strait Islander people affected by violence. But that funding doesn’t stretch that far considering Aboriginal women are 34-80 times more likely to experience violence in Australia.

On the plus side, the Morrison Government has announced a A$200 million Indigenous Youth Education Package. This package will help strengthen Indigenous participation in education at both secondary and university levels. And there is a A$2.7 million grant scheme for Indigenous musicians.

Higher Education; Dr Gwilym Croucher, Senior Lecturer, Melbourne Centre for the Study of Higher Education

There were only a few direct announcements for higher education in the budget, with most major post-secondary education initiatives focused on the vocational education and training sector.

These include establishing a National Skills Commission to oversee the Commonwealth and ten new Training Hubs across Australia to support industry pathways. The total skills package is projected to be worth A$523.5 million. Funding for vocational education and training will be a priority for whichever party forms the next government later this year.

In higher education the government will continue its cap on undergraduate university places.

The budget includes some research initiatives, including A$5 million for the University of Melbourne to assist construction of the Stawell Underground Physics Laboratory. It will also fund diabetes research, additional research infrastructure, and establish a Health and Medical Research Office (A$20.0 million) to assist managing the Medical Research Future Fund (MRFF) .

The government also committed significant funds from the MRFF to genomics and Indigenous health. Nonetheless, the government’s overall investment in research remains stagnant.

For International students, from November 2021, the government confirmed that they will be able to apply for an additional year on a second post-study work visa if they complete a higher education or postgraduate qualification in a regional area, and live in a regional area.

This article was published by Pursuit.

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