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Budget Breakdown — What’s in it for you?

<p>On 11 May 2021, the federal government released its 2021–2022 budget. The previous year has been tumultuous, and this budget reflects that—the Liberal party has essentially been forced by circumstance to abandon their small-government ideology with big-spending measures, paving the way to national debt of up to $1 trillion.  Some media commentators have called this [&hellip;]</p>

On 11 May 2021, the federal government released its 2021–2022 budget. The previous year has been tumultuous, and this budget reflects that—the Liberal party has essentially been forced by circumstance to abandon their small-government ideology with big-spending measures, paving the way to national debt of up to $1 trillion. 

Some media commentators have called this a Labor-esque budget. But does it really signify a more empathetic turn in the Liberal party’s approach to the economy? Let’s have a look.

Education

The government has promised $10 billion for higher education over the 2021–22 period, but this isn’t new funding. In fact, there will be a 10 per cent funding cut to universities per year over the next three years; a $741 billion reduction in the next financial year, and an additional cut of $387 million the year after. 

That’s rather dire. Maybe you’re contemplating dropping out of your Bachelor’s and heading to TAFE? Bad news as well—funding will be cut by up to 24 per cent. 

In slightly better news, there’s been $2.7 billion allocated to create more than 170,000 new apprenticeships, more STEM scholarships for women, and another 5,000 places in higher education short courses. However, most of this funding is going to private institutions.

Climate

The government has spent big on preparing for climate change, but very little on actually slowing it down. 0.3 per cent of government spending will address the climate crisis.

The government has pledged $209.7 million over four years to establish the Australian Climate Service, which will work to prepare for more extreme weather events due to climate change. $600 million will also go towards the National Recovery and Resilience Agency, which will help communities with relief and recovery following extreme weather events. 

$263.7 million has been allocated for carbon capture projects, described as an “expensive failure” by the Climate Council, and $275.5 million for four “clean hydrogen” export hubs. Additionally, there is $30 million for a big battery and microgrids for Indigenous communities in the Northern Territory, and $19.3 million for a renewable energy microgrid in the Daintree. There’s also $639 million for low emissions international technology partnerships.

On the flip side, the government has provided $51 billion in subsidies to coal, oil, and gas corporations over the next five years. $58.6 million will go to the gas industry over four years, which will support the expansion of pipelines, gas storage facilities among other infrastructure for the gas industry. 

Mental health 

The government has offered a much-needed $2.3 billion boost to mental health funding in the new budget. Central to their plan is the creation of a National Suicide Prevention Office with $298 million allocated.

For those aged 12–25, there will be an additional $278 million spent on 10 new Headspace clinics. 

There’s also $79 million for a renewed National Aboriginal and Torres Strait Islander Suicide Prevention Strategy. 

For Australians over the age of 25, there has also been $487 million allocated to Head to Health centres, with 40 mental health treatment clinics. This includes $11 million for a digital platform for Head to Health to provide online counselling, referrals, and peer and clinical support. 

However, there are concerns that the bulk of the money is for basic counselling services, as opposed to increases for clinical psychology or psychiatry services that experts have called for. This means that individuals that require more intensive expert treatment may not be able to get the help they need if they are unable to pay for specialist services out of pocket. 

The government has also ignored calls from mental health experts and the Productivity Commission to increase the number of psychologist sessions that Australians can claim from Medicare—although the cap was temporarily doubled from 10 to 20 sessions a year in 2020, this will expire in June 2022. 

Women 

This budget was hyped as being designed for women, and for a party mostly composed of men, they certainly tried, pledging $3.4 billion to “women’s issues”. 

This includes $1.7 billion to fund changes to child care, which will focus on helping low and middle income families with more than one child.

$357 million has been pledged over three years to allow states to invest in services to support women and children who are experiencing, or are at risk of violence. 

There has also been $354 million set aside for a women’s health package, including $100 million for cervical and breast cancer screening, and $47 million for perinatal and postnatal anxiety and depression services. 

Let’s hope the next budget will make some space for a more effective respectful relationships campaign. I know I haven’t been able to enjoy a milkshake since their last attempt. 

JobTrainer

The government has seemingly abandoned the JobMaker program that was central to the last budget, but is pushing through with JobTrainer which was first announced last year. The government’s JobTrainer program will have $500 million in funding over two years to provide low-fee and fee-free training places for JobSeekers and young people in areas of identified skills. 

We’ll have to keep an eye on the success of this one, as last year it only delivered 1,900 of the promised 45,000 places.

Housing

A lot of the housing response was focused on patching up current issues in the housing market by helping first-home buyers get their foot in the door. The government will allow first-home buyers to withdraw up to $50,000 from their super for a house deposit, provided they live in the house, rather than using it for investment. There’s also been 10,000 new places opened up in the Family Home Guarantees scheme, with first-home buyers being able to put down a deposit as low as 5 per cent for a property. 

Single parents are also seemingly helped, being able to buy a house with a deposit of just 2 per cent. They then get to look forward to paying off the interest on the remaining 98 per cent of the house price. 

Economists have expressed worry that such measures will further inflate housing prices, putting renters at risk of higher prices for shelter.

There was no announcement about social housing or more accessible means of shelter.

Personal Finances

Despite increased government spending, the government is delivering a further $7.8 billion in personal income tax cuts to more than 10 million low and middle-income earners worth up to $1,080 for individuals. This is an extension of the COVID tax offset for another year. 

However, the government’s tax cuts do little to address the stagnation of Australian wages, which have been weaker than 2014 levels for over a decade.

Welfare and services 

The government has pledged $1.2 billion for a digital economy strategy, with $500 million going towards overhauling the myGov and My Health Record websites. 

This funding will supposedly make it easier for people to find services, as well as managing payments and claims. 

It is hoped that the time saved by the overhaul will be worth around $3.6 billion over a decade.

 

So, what are your thoughts about the Budget? Any concerns that you may have? Feel free to let us know at editors@farragomagazine.com!

 

(Image credit: Melissa Walker Horn / Unsplash)

 
Farrago's magazine cover - Edition Three 2021

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