The big ones: health, infrastructure and education

6 May 2016

Health and the rising tax on cigarettes

Though ex-PM Tony Abbott has voiced criticism of the so-called “workers’ tax” on smokers, the 2016 budget continues the implementation of a dramatically rising tax on cigarettes.

Despite evidence that this tax will hit the poorest hardest, the government’s stance has received overwhelming public support. Those opposed say that statistically, the increase in tax is likely to be little deterrent to current smokers, but the continued rising prices will be felt strongly throughout the lower socio-economic demographic.

The government’s objective is to reduce the Australian adult smoking rate to 10 per cent or less. The government is expecting this tax will reduce the Aboriginal and Torres Strait Islander smoking rate by 47 per cent by 2018.

The government will also be investing $48.6 million into removing cultural, financial and geographical barriers experienced by Aboriginal and Torres Strait Islander people living in remote or regional areas.

The $50 billion infrastructure plan

The government has committed to the long-awaited Melbourne to Brisbane inland rail project, though this budget only sees the financing for “pre-construction activities”.

The Turnbull Coalition government continues to push for Melbourne’s East West Link. $3 billion of targeted funding in the budget is being offered to the Victorian government to build the controversial road. The Andrews Labor government in Victoria is steadfastly opposed to the road, and so that money is unlikely to go anywhere soon. Though the Turnbull government “remains committed” to the East West Link, there will be a reallocation of $1.5 billion originally for the tollway to several new projects, such as a rural and regional roads package and an urban congestion package.

The government claims that high speed broadband will be completed sooner than expected, with 9.1 million homes and businesses expected to have the controversial internet service by the end of 2018. When entirely rolled out, the NBN will reach 12 million homes and businesses in total.

The Government says it is “unlocking” the Northern Territory’s potential. They will provide $5 billion in funding to the private sector to invest in developing water resources and a sustainable workforce in the region.

Training > education

Education took a backseat in this year’s budget, while several new initiatives were announced in the training area. Treasurer Scott Morrison expressed his personal attachment to the new employment scheme, Youth Jobs PaTH, which has replaced the Work for the Dole Scheme introduced by Joe Hockey in 2015.

The government did, however, suggest several changes to higher education. Despite describing higher education as the the “key to enhancing equality and delivering social and economic mobility”, the budget paper states that the system must “provide a return on investment” for the nation.

After attempting to pass the senate twice, and being defeated twice, fully deregulated course fees have been dropped. In the new proposal, the government cited their disappointment that, despite the support of almost all university chancellors, fully deregulated fees were no longer going to be considered.

This fails to acknowledge the motives of many vice-chancellors. Deregulated fees would allow each university to charge students any fee for their education that it wished. The potential boost to many university’s budgets won over many vice-chancellors, even if they would have preferred a different model (such as more public funding going to universities).

[Read more on the potential changes to higher education.]

Since the introduction of HECS student loans in 1989, the number of students in higher education has almost doubled. Now, more than one third of people aged 25–35 hold a bachelor’s degree or higher qualification.

To some extent, this has increased competition in the job market among graduates. As a result, the government has raised concerns that 19 per cent of HECS debts may never be repaid. Currently with a total outstanding debt hovering over $40 billion, the government has again voiced a hope to raise university fees, while fostering an inclusive higher education system. How this goes remains to be seen. However, it is undeniable that raising the cost of university fees will leave graduates with larger debt for longer, and will likely exclude a number attempting to gain higher education.

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