Budget 2018/19: Little Relief for NFPs

Federal budgets are an opportunity for governments to share their vision for the future. It needs to be more than just a pitch and list of activities, writes Andrew Cairns, CEO of Community Sector Banking.

Australia is grappling with rising social inequality, an increasing divide between the “haves” and “have nots”, a broken housing system, increased homelessness and its associated problems, and many are disadvantaged. Australia demands long-term strategy and funding for social infrastructure to address these issues.

It seems that the budget has served us an array of “announceables”.

Government can’t do everything. But this budget is a missed opportunity for a vision to collaborate to mobilise new funding for the social infrastructure Australia so sorely needs.

How can we do it? By leveraging government balance sheets we can incentivise private investors, like superannuation funds, to invest in vital social infrastructure, such as housing or aged care. The federal government can do more in this area – particularly in helping to create new investment opportunities that deliver both social and commercial outcomes.

It’s again left to those in the not-for-profit sector to stand up and advocate for the needs of those less fortunate.

What we saw in the budget

Tax reform

Low and middle-income earners were winners in the budget, with planned tax cuts and a flat tax rate. Low-income earners on up to $37,000 a year stand to gain a tax offset of $200, while people on between $48,000 and $90,000 receive the maximum offset of $530.

It’s welcome relief in the face of rising living costs and stagnating wages in an economy which is still growing albeit slowly. Our future growth is still heavily reliant on our business sector. Again, our biannual Rental Affordability Index has shown it’s increasingly unaffordable for many vulnerable groups to live in Australia’s cities, such as single parents, pensioners, and youth.  

We support long term taxation reform but believe much more needs to be done.

Aged care

Aged care was the centerpiece, with $1.6 billion for 14,000 in-home care places, as well as spending on mental health and improving access to services in rural and regional areas.

Still, more is needed. With more than 150,000 people on the aged care waiting list, the government needs to draw on its ability to incentivise investment in aged care. As well as to ensure the right kind of services – that’s customer-centric care, not just straight service provision. Looking ahead, there’s major challenges around the long-term financial sustainability of aged care, thanks to our aging population and the housing crisis meaning fewer people will own homes in their twilight years.

Combating violence

An extra $54 million will go to tackle domestic violence, sexual assault, cyber safety and elder abuse.

It’s welcome as all these issues seriously undermine the health and strength of our communities. Still, we need to ensure adequate support for frontline services and programs that go to break the cycle of abuse.

Domestic and family abuse is estimated to cost the economy $21.7 billion each year. $54 million seems to be a small investment in the face of this.

Welfare recipients

There will be a new round of the “robodebt” recovery scheme, and measures to recover fines – forecast to save $300 million.

This scheme was highly criticised for good reason, as it has put some of the most vulnerable and disadvantaged in our society under greater pressure and stress. We have to be careful in ensuring we address the cause and not the symptoms.

Refugees and people seeking asylum

There were cuts to support services for refugees and asylum seekers, at $68 million.

Again, this move will put vulnerable people under greater pressure, leaving not-for-profits to fill the gaps.

Foreign aid

Foreign aid was also cut by another $140 million.

It belies the generosity of Australians and undermines our responsibilities in foreign aid, helping to strengthen communities overseas. We need to have a commitment to our role in global leadership and equality.

What we didn’t see in the Budget

Housing crisis

There was little new announcements to address the enormity of our housing crisis. We still lack a national housing strategy and minister for housing.

When one in 200 people are homeless on any given night, rents in capital cities are unaffordable, and fewer people are able to afford a home, this is a gross omission.

Housing must be recognised as the social infrastructure it is. It is the cornerstone of people building a better life for themselves; accessing work, the health system, and schools.

Disability

There’s still a big question mark over the future sustainability of the NDIS, with no Medicare levy to help fund the program. It comes as Flinders University research estimates the NDIS is failing one third of people living with disability. A successful NDIS is critical if we are to have a truly inclusive Australian society based on dignity, self-determination and respect.

Newstart and Youth Allowance

Little surprise there was no increase in the Newstart and Youth Allowance, despite calls from the sector and conservatives alike, including the Business Council of Australia and Deloitte economist Chris Richardson.

Indigenous issues

The Uluru Statement from the Heart continues to be ignored – a great shame and missed opportunity to take a big step forward in reconciliation.

While some measures are welcomed, overall this budget could have done more to realise a vision of Australia where people can live long, dignified and quality lives.

About the author: Andrew Cairns is the CEO of Community Sector Banking. He believes NFPs are at the heart of a healthy society – they create the social fabric of those communities and ensure their wellbeing. After more than 30 years working nationally and internationally in the corporate sector, he maintains that business can and should be a force for good.

Our 2018 budget coverage is brought to you by Community Sector Banking.