Breaking down the budget: Experts weigh in on what the new budget means for welfare, aged care and cost of living
- Replies 3
Did you think that was the end of the budget content, members? Not to worry! We’re now seeing more and more analyses and reports released as industry professionals publish their thoughts on the latest federal budget.
So what exactly do they have to say about welfare and aged care?
Let’s turn to Professor Paul Henman, UQ’s Professor for Digital Sociology and Social Policy.
‘The Labor Government’s 2022–23 “steady-as-you-go” budget has avoided immediate cash handouts due to inflation risks, instead opting for more steady co-payments and investments with medium-term results on social wellbeing.’
This is something we knew heading into the budget with widespread emphasis on its ‘bread and butter’ nature. Unfortunately, that means Australians aren't receiving any immediate relief.
So what is the focus?
The focus is on locking in election promises – such as:
When looking at the list above, one glaring omission stands out: pensioners. While providing incentives to bring in new aged-care workers is positive, it wasn't at the top of anyone's list in terms of assisting Australia's seniors.
Henman notes, this breakdown of spending largely benefits working families and households and leaves those perhaps most in need ‘without any immediate support’.
‘There remain glaring gaps for addressing the immediate pain people are experiencing, especially among those relying on Centrelink benefits.’
This is something we’ve heard firsthand from SDC members.
While he notes the Government’s affordable homes investment was both a ‘surprise’ and ‘an important first step to addressing Australia’s long-standing and growing housing affordability crisis’, this is also not an immediate relief. (More on this soon.)
So, members, don't expect a cash bonus in your bank account anytime soon.
What other areas received funding?
What are the worst challenges we’re facing?
According to Professor Henman, ‘The Australian Government is facing these challenges with one hand tied behind their back with their continued commitment to the excessive stage 3 tax cuts legislated by the Coalition government.’
Now, let’s change our focus and look to UQ’s Alicia N. Rambaldi, a Professor of Economics and Director of the School of Economics Centre for Efficiency and Productivity Analysis.
So what did the budget bring to the table, from an economic perspective?
Professor Rambaldi notes there is a lack of details surrounding the Housing Accord. What we do know is that roughly 30,000 of the proposed million new homes will be funded by federal and state governments, with the rest relying on finance from private investors and superannuation funds.
‘The Accord has a target of 1 million new, well-located and more energy-efficient homes to be delivered over 5 years, starting from mid–2024. It is interesting to note the use of the terms “well-located and energy efficient”.’
Those terms sound great to us and it’s promising that the Accord is looking ahead and not simply dumping a surplus of homes in locations no one lives. We have to look after the quality of living, after all. Energy-efficient homes, in particular, will relieve some of the burdens of cost-of-living pressures by lowering the cost of energy.
She also brought up the frequently discussed downsizing incentive. The initiative is said to improve housing affordability of middle-and lower-income younger households, whether they choose to rent or own. But what about Australian seniors who wish to ‘age in place’ or maintain larger homes they purchased with hard-earned money to have room for visitors and family?
And what about renters?
'In the immediate term, however, the historically low supply of rental places will continue to strongly affect private renters with low incomes, the majority of whom spend over 30 per cent of their income on rent.’
We already know that the current couple’s pension is barely enough to afford 1% of the houses available for rent. You can read more on that here.
To look at cost-of-living pressures, let’s turn to UQ’s Flavio Menezes, a Professor of Economics and Director of the Australian Institute for Business and Economics.
Can we expect cost of living pressures to subside?
Professor Menezes says, ‘The October budget was carefully crafted to not fuel inflation, meaning that only limited assistance has been provided to households to meet cost-of-living pressures.’
Basically, the government isn't spending much money. While this has been done for a reason, it doesn't make it any less difficult on Australian's who were perhaps hoping for a more immediately beneficial budget.
Once again, the issue of no immediate relief came up:
‘The measure with the most immediate impact is the increase in maximum childcare subsidy rate. However, this only occurs from July 2023, and it is likely that some of the subsidy will be eroded in the form of higher fees.’
‘The savings of up to $12.50 per script for medicine under the Pharmaceutical Benefits Scheme, from January 2023, will also offer limited relief. It will not affect concessional cardholders, who arguably face the brunt of increased inflation.’ As we discussed in our earlier budget coverage.
‘They will continue to pay at most $6.80 per script until reaching the $244.80 annual threshold when scripts become free.’ So seniors can expect to see no change in this respect.
‘Stage 3 tax cuts will only begin in July 2024, and those on higher incomes will benefit the most from them.’ Once again, leaving the most vulnerable in our society in the dust.
‘The bottom line is that the concern with inflation resulted in households receiving limited support from the budget to meet cost-of-living pressures.’
Only time will tell whether these issues will be resolved anytime soon.
Though, we do now know the Government is already considering intervention in the gas market to alleviate rising electricity costs.
So there you have it, members, insight straight from the mouths of three experts.
Now, let’s cross our fingers and hope some immediate relief can be implemented soon.
What are your thoughts?
Keen to hear more about the budget? You can watch a great two-minute breakdown here:
Credit: The Guardian
So what exactly do they have to say about welfare and aged care?
Let’s turn to Professor Paul Henman, UQ’s Professor for Digital Sociology and Social Policy.
Experts are keeping a close eye on the Government’s plans. Image Credit: Shutterstock
‘The Labor Government’s 2022–23 “steady-as-you-go” budget has avoided immediate cash handouts due to inflation risks, instead opting for more steady co-payments and investments with medium-term results on social wellbeing.’
This is something we knew heading into the budget with widespread emphasis on its ‘bread and butter’ nature. Unfortunately, that means Australians aren't receiving any immediate relief.
So what is the focus?
The focus is on locking in election promises – such as:
- enhancing childcare subsidies ($4.7 billion over 4 years)
- extending paid parental leave ($0.5 billion over 4 years)
- increasing aged-care salaries ($2.5 billion over 4 years)
- reducing pharmaceuticals by up to $12.50 per script*
When looking at the list above, one glaring omission stands out: pensioners. While providing incentives to bring in new aged-care workers is positive, it wasn't at the top of anyone's list in terms of assisting Australia's seniors.
Henman notes, this breakdown of spending largely benefits working families and households and leaves those perhaps most in need ‘without any immediate support’.
‘There remain glaring gaps for addressing the immediate pain people are experiencing, especially among those relying on Centrelink benefits.’
This is something we’ve heard firsthand from SDC members.
While he notes the Government’s affordable homes investment was both a ‘surprise’ and ‘an important first step to addressing Australia’s long-standing and growing housing affordability crisis’, this is also not an immediate relief. (More on this soon.)
So, members, don't expect a cash bonus in your bank account anytime soon.
What other areas received funding?
- domestic violence funding ($169 million for 500 frontline workers)
- restoring telepsychiatry mental health services, and disaster-relief response ($3 billion)
- commitments to the social service sector ($0.5 billion)
What are the worst challenges we’re facing?
- energy prices are anticipated to rise by 50 per cent in less than 2 years
- Insufficient support for the National Disability Insurance Scheme
- Insufficient resources for public hospitals
- the declining Medicare system (reduction of bulk billing and higher GP out-of-pocket costs.
According to Professor Henman, ‘The Australian Government is facing these challenges with one hand tied behind their back with their continued commitment to the excessive stage 3 tax cuts legislated by the Coalition government.’
Now, let’s change our focus and look to UQ’s Alicia N. Rambaldi, a Professor of Economics and Director of the School of Economics Centre for Efficiency and Productivity Analysis.
So what did the budget bring to the table, from an economic perspective?
Professor Rambaldi notes there is a lack of details surrounding the Housing Accord. What we do know is that roughly 30,000 of the proposed million new homes will be funded by federal and state governments, with the rest relying on finance from private investors and superannuation funds.
‘The Accord has a target of 1 million new, well-located and more energy-efficient homes to be delivered over 5 years, starting from mid–2024. It is interesting to note the use of the terms “well-located and energy efficient”.’
Those terms sound great to us and it’s promising that the Accord is looking ahead and not simply dumping a surplus of homes in locations no one lives. We have to look after the quality of living, after all. Energy-efficient homes, in particular, will relieve some of the burdens of cost-of-living pressures by lowering the cost of energy.
She also brought up the frequently discussed downsizing incentive. The initiative is said to improve housing affordability of middle-and lower-income younger households, whether they choose to rent or own. But what about Australian seniors who wish to ‘age in place’ or maintain larger homes they purchased with hard-earned money to have room for visitors and family?
And what about renters?
'In the immediate term, however, the historically low supply of rental places will continue to strongly affect private renters with low incomes, the majority of whom spend over 30 per cent of their income on rent.’
We already know that the current couple’s pension is barely enough to afford 1% of the houses available for rent. You can read more on that here.
To look at cost-of-living pressures, let’s turn to UQ’s Flavio Menezes, a Professor of Economics and Director of the Australian Institute for Business and Economics.
What do UQ’s Economic experts say? Image Credit: Shutterstock
Can we expect cost of living pressures to subside?
Professor Menezes says, ‘The October budget was carefully crafted to not fuel inflation, meaning that only limited assistance has been provided to households to meet cost-of-living pressures.’
Basically, the government isn't spending much money. While this has been done for a reason, it doesn't make it any less difficult on Australian's who were perhaps hoping for a more immediately beneficial budget.
Once again, the issue of no immediate relief came up:
‘The measure with the most immediate impact is the increase in maximum childcare subsidy rate. However, this only occurs from July 2023, and it is likely that some of the subsidy will be eroded in the form of higher fees.’
‘The savings of up to $12.50 per script for medicine under the Pharmaceutical Benefits Scheme, from January 2023, will also offer limited relief. It will not affect concessional cardholders, who arguably face the brunt of increased inflation.’ As we discussed in our earlier budget coverage.
‘They will continue to pay at most $6.80 per script until reaching the $244.80 annual threshold when scripts become free.’ So seniors can expect to see no change in this respect.
‘Stage 3 tax cuts will only begin in July 2024, and those on higher incomes will benefit the most from them.’ Once again, leaving the most vulnerable in our society in the dust.
‘The bottom line is that the concern with inflation resulted in households receiving limited support from the budget to meet cost-of-living pressures.’
Only time will tell whether these issues will be resolved anytime soon.
Though, we do now know the Government is already considering intervention in the gas market to alleviate rising electricity costs.
So there you have it, members, insight straight from the mouths of three experts.
Now, let’s cross our fingers and hope some immediate relief can be implemented soon.
What are your thoughts?
Keen to hear more about the budget? You can watch a great two-minute breakdown here:
Credit: The Guardian
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