After months of speculation the federal budget landed in Canberra on Tuesday and triggered a national argument about whether it was the document Australia needed, or the one the government wanted.
Two days later, the Prime Minister and Treasurer are working hard to sell their plan to voters, many of whom expect to be worse off if the government gets its plans through the senate.
While the broad details of the budget are being debated on talkback, in offices and around the kitchen table, the fine print of the key initiatives is often lost as both sides of politics and assorted interest groups mount a noisy and public battle to win the budget argument.
But it is in those details that the true nature of the government’s plan for the nation is found and what may see large parts of the budget die a public death when they reach the senate. Here, The New Daily explains what’s at the heart of the most contentious measures announced by Treasurer Joe Hockey.
What is it? The government plans to deregulate university fees in the budget. Fee deregulation will allow universities to set their own tuition fees, free of any government quotas or limits. This could theoretically result in a fee reduction for some courses, but most pundits predict fee hikes.
But did you know … The government is also getting rid of the Reward Funding program, which the Labor government introduced to incentivise universities to meet performance and diversity targets – such as the 20 per cent low socio-economic enrolment target.
President of the National Union of Students Deanna Taylor said that the axing of $290 million in funding for this program will hurt disadvantaged students and is “passing the buck” of diversity targets from the government onto students themselves.
“All the scholarships and bursaries in the world will not cover the massive increases in student fees that we are going to see in coming years,” Ms Taylor said.
Budget measure: Stricter dole payments
What is it? Unemployed young adults have been among the biggest budget losers. Under 25s will be moved from the more generous Newstart Allowance to the lower rate of Youth Allowance.
But did you know Some young job seekers could get as little as six months of unemployment benefits each year. Those aged under 30 will be forced to wait between one and six months to qualify for welfare payments, depending on how long they’ve been employed in the past.
After the waiting period is over, job seekers will have to work for the dole at least 25 hours per week to keep getting the payment. Then it’s a case of wash, rinse and repeat. After six months, they’ll be thrown back onto the waiting list for up to another half year.
Dr Veronica Sheen, a social policy researcher at Monash University, said that these changes are eroding Australia’s social safety net.
“Young people are a significant target,” Dr Sheen said of the budget.
But there is a reprieve for full-time students, single parents, the disabled and others who can’t work full-time. These people won’t have to wait, thus justifying the ‘Earn or Learn’ slogan used frequently by the government.
What is it? Arguably one of the most controversial budget measures is the erosion of universal Medicare through increased co-payments. The co-payments will be imposed for visits to a GP and hospital emergency departments, and for blood tests and medical imaging. Rebates for such things as blood tests and scans will also be decreased.
But did you know … The increased co-payments will only apply to the first 10 GP visits for children, pensioners and other concession cardholders.
Those sick enough to have to use these services more than 10 times a year will avoid the fees from the 11th visit onwards. While this will come as a relief for some, the Australian Medical Association (AMA) is not convinced that the co-payment scheme is a good idea.
AMA Vice President Professor Geoffrey Dobb said after the budget’s release on Tuesday that vulnerable patients will still suffer.
“Many Australians already pay a co-payment, and there is a place for co-payments for patients with the right model, but this is not the right model,” Professor Dobb said. “It does not have the right protections.”
Budget measure: Cuts to state education and health
What is it? The Commonwealth has cut state health and education funding to save $80 billion over the next decade.
But did you know … Deep cuts to state education and health funding is a chess move by the federal government to put a GST increase on the national agenda, political commentators say.
Joe Hockey has refused to comment on potential GST hikes saying it was a matter for the states, though he says there won’t be a rise without an election.
The states, which have slammed the budget, will need an increase in revenue to cover the shortfall in education and health with Opposition Treasurer Chris Bowen saying: “As sure as night follows day, Premiers will say ‘to make up from this cut, we will need to increase the GST’.”
Flinders University political commentator Haydon Manning said the revenue pressure would drag the GST debate onto the main stage.
“For years no politician has wanted to talk about increasing the GST, now they almost have to,” he said.
Budget measure: Fuel excise rise
What is it? Fuel excise to increase twice yearly with inflation – likely to be 1 cent per year. It will raise an extra $168 million in its first year, growing to $2.2 billion of new revenue by 2018.
But did you know … Joe Hockey has promised all new revenue from the fuel excise increase will go towards infrastructure, specifically to fund the $11.6 billion infrastructure growth package.
But, in general the federal government spends far less on roads than it earns from the fuel excise.
Last year the NRMA said of the 38.1 cent per litre excise, the government spent 10 cents on infrastructure funding. The rest went into the general revenue pool.
To put the rise in perspective, an increase with inflation is likely to rise 1 cent per year. That means in a standard 50 litre tank of a Corolla, you’d spend an extra 50 cents on a full tank. If you fill up once a week (which is a minimum 520 km) that’s an extra $25 a year.