As the dust settles on the Coalition’s fourth budget, a few howlers are emerging.
Luckily, it’s nothing like how the 2014 austerity budget unfolded. In the harsh light of day, that brainchild of Joe Hockey and Tony Abbott seemed to only grow in savageness.
In contrast, this year’s budget, Scott Morrison’s second, is a big-spender and big-taxer aimed at popularity, so it’s no surprise the big banks, squeezed with a new profits levy, are complaining the loudest.
But there are important cuts that shouldn’t go unnoticed, especially a harsh welfare measure that not even Mr Abbott and Mr Hockey attempted.
Drug testing for welfare recipients
Not deterred by the unpopularity of its automated debt program, the government announced on Tuesday it would drug test 5000 “random” welfare recipients “across three locations”.
It will be a two-strikes test. On a first failure, recipients will be forced onto the infamous cashless welfare card, ostensibly to prevent them from buying drugs and alcohol.
After the second strike, they’ll be “referred to a contracted medical professional for an assessment of their substance abuse issues and any appropriate treatment options”.
This will add to the growing impression that the cashless card is a punishment, and may be seen as another step in nationwide rollout of the card. (The card is also being trialled into extra locations from September).
Prime Minister Malcolm Turnbull told the ABC: “The lesson is, don’t do drugs and the bottom line is that if you’re on welfare, what you’ve got to do is you’ve got to get off welfare and into a job and we’re doing everything we can to achieve that. This is doing people a big favour.”
This is despite high unemployment (5.9 per cent) and high labour underutilisation (which adds unemployed, underemployed and those who have given up looking) at over 14 per cent, higher than the GFC peak of 13.7.
The Greens have even asked for legal advice on whether the drug testing would be legal. Greens leader Richard Di Natale slammed it as a “very dangerous precedent” and an “affront to people’s individual liberties” that would drive people deeper into addiction.
Welfare staff cut
Even as the Centrelink debt scandal rages, and hundreds of panicked calls go unanswered, the government has chosen to subject the Department of Human Services to the biggest staffing cuts in the budget.
Average staffing at the Department of Human Services will be cut by 1188 in the next financial year, from 29,835 to 28,647, according to Tuesday’s budget.
The DHS oversees Centrelink, Medicare, job seeker and child support services among others. There have been a flood of complaints recently about the department’s computer algorithm, forced on it by the Minister, that pressures former welfare recipients to repay ‘debts’ because of alleged overpayment in years past.
The Department of Social Services will also suffer, with average staff to be cut by about 40, from 1984 to 1942.
By announcing the university changes before the budget, the government got to skip over the fact it will hike tuition fees by about 8 per cent and force graduates to pay back their debts sooner and faster.
The HELP debt repayment threshold will drop from $54,869 to $42,000, meaning a former student earning $45,000 will hand over $675 a year, when before they paid nothing. And if their wage goes up to $50,000 they’ll sacrifice $750.
The government will also impose a 2.5 per cent cut to university funding for the next two years and increase student fees by 7.5 per cent by 2021.
This mean students will pay between $2000 and $3600 more for a four-year course. A six-year medical degree would result in student fees up to $75,000.
The cost of a four-year nursing degree will increase $1250, from $26,550 to $27,800, while Arts students will pay $700 more, from $19,700 to $20,400, according to the government.
For a science student, the fee hike will mean their degree will jump from $28,100 to $29,100, and for someone studying teaching, they’ll pay $27,800, an increase of $1250.
Other covert cuts
Governments have plenty of tricks up their sleeves for presenting budgets in a way that suits their agenda.
One way to strip away the rhetoric is to compare what the government wants to spend to how it thinks the economy will grow. This shows you expenditure as a percentage of national income (GDP), and is a fairly good way of comparing spending changes over time.
Some interesting changes are highlighted in yellow.