Federal Budget 2015 Federal Budget ‘Dull budget’ doesn’t please all
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‘Dull budget’ doesn’t please all

AAP
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The nation has reacted with head-scratching to the Federal Budget as it proves the ideological battles of the Abbott Government — climate change, ending the age of entitlement, budget emergencies — are in a holding pattern or have been sacrificed on the altar of the gods of opinion polls.

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Commentators have had their say, and here are some of the vital assessments from community leaders after the budget finally showed the way the government was to fund their sectors.

Small Business

The government aims to splurge on small business with a 1.5 per cent tax cut and an instant tax deduction of assets worth $20,000. Unincorporated businesses will be given a five per cent tax cut as well. “These small business measures, whilst generous in principle, only tinker at the edges of the small business tax regime,” Taxpayers Australia reported.

The lobby group said it expected more change after the tax white paper concludes its review. “The structural reform to the tax system that the Australian community yearns for is unfortunately still some time away,” the group stated.

Shutterstock
Small businesses are far and away the big winners in this budget. Photo: Shutterstock

Council of Small Business of Australia chief executive Peter Strong said the package sent a good message.

“We’ve never seen a budget this good for small business,” he said. “Some of my members were annoyed with Hockey, we’re not annoyed anymore.”

Health, the MBS and PBS

The health system is expected to contribute a lot to savings but detail was scarce in the 2015-16 budget.

Australian Medical Association president Brian Owler said the budget withheld detail on expected big-ticket savings.

The Pharmaceutical Benefits Scheme and the Medicare Benefits Schedule are being reviewed but the budget states they will save about $400 million, which did not reflect a PBS savings target of up to $7 billion reported in The Australian prior to the budget.

In fact $1.6 billion will be spent on including new drugs on the PBS.

The Grattan Institute’s health fellow Peter Breadon said “some of the most important changes were what wasn’t there”.

“They’re holding off big changes to the MBS until they get their review,” he said.

He said the good aspects were the opt-out trial of the e-health scheme, and the changes to cervical cancer testing.

Professor Owler said it was “insulting” to have the leaders of Australia’s health organisations attend the budget lock-up, where people see the budget papers and are locked into the room for six hours, but have so little detail in the budget for health.

“It was insulting to have the leaders of Australia’s health organisations locked in a room with no budget detail,” Professor Owler said.

Public Sector

The latest budget has re-broken the Government’s broken promises of no cuts to the ABC, education or health with its second budget.

The 2015-16 budget intends to slash a further 190 jobs from the ABC, the Communications and Public Sector Union said, after last year cutting 241 jobs.

The Bureau of Meteorology will also suffer a 6.9 per cent cut and Defence will be slashed 5.1 per cent or 980 jobs.

The public sector took a hit from the 2014-15 budget which slashed more than 10,000 jobs, CPSU national secretary Nadine Flood said.

Australian Capital Territory Treasurer Andrew Barr told the ABC his region, which hosts many public servants would no longer be strangled by a hiring freeze and the worst of the cuts are over.

Ms Flood said the government wouldn’t fix the budget by making public sector cuts.

“You cut the public service and you end up cutting services for the public. It’s as simple as that,” she said.

Youth Unemployment

The government will spend $330 million to send community workers out to get young people who are in disadvantaged areas into work.

But the Australian Youth Affairs Coalition has reacted cautiously, observing it looks like a repackaging of the youth connections program.

“We’re a little bit disappointed that the government now sees the value in that, we’ve lost almost a year by the time the new youth employment strategy starts,” said National Director of the AYAC Leo Fieldgrass.

unemployment
The dole measures met with a mixed response. Photo: Shutterstock.

“We support the need to tackle the high rate of youth unemployment but at the moment it’s unclear if the new strategy is going to compensate for the large scale de-funding of target youth support programs in the 2014 budget.”

The government will also drop its proposal to stop young people getting Newstart for six months, a measure that was blocked in the Senate from 2014, and has been replaced with a one-month wait.

“We are very concerned to see that young people up to the age of 25 are going to be subject to the four-week waiting period for income support,” Mr Fieldgrass said.

“Especially as they’re going to be required to take extra job seeking activities – this is a fear that its part of a highly punitive approach for young people who need income support.”

Foreign Aid

Aid to Indonesia has been almost halved while aid to Africa has been completely decimated and slashed by 70 per cent.

ChildFund Australia CEO Nigel Spence said he was “deeply disappointed” the cut to foreign aid had gone ahead.

“We reject the idea that cuts to aid are necessary to repair the budget or fund domestic programs,” Mr Spence said.

“Aid spending amounts to just one per cent of the Federal Budget. Even wiping out the entire aid program would have little impact on the Budget’s bottom line. ”

The government will slash $3.7 billion from foreign aid over three years.

Science

Despite continued funding for the National Collaborative Research Infrastructure scheme, science groups said they feared overall funding would continue to decline.

“It’s great that NCRIS facilities will continue to be supported for the next two years but significant reductions to block grants to researchers in universities is like taking engines off the jumbo jet,” Australian Academy of Science president Andrew Holmes said.

“As the mining boom slows, this should be a time of growth in science funding to allow us to better prepare for the knowledge economy we need. Instead our future prosperity is at risk.”

Families

With a $3.5 billion childcare package at the centre of this year’s budget, consumer advocacy group CHOICE said families were the “clear winners”

The Kouk
Stephen ‘the Kouk’ Koukoulas was far from complimentary about the budget.

“This budget is a mixed bag,” CHOICE chief executive Alan Kirkland said.

“The clear winners will be families that have many children in childcare, although some stay-at-home mums will lose benefits and support payments.

“The impacts really depend on individual circumstances of consumers.”

The Economy

Leading economist and Per Capita research fellow Stephen Koukoulas said the budget was “neither here nor there”.

“It’s a budget that neither tackles debt and deficit and its not tackling high unemployment,” he said.

“The budget is about high spending and high tax, so it’s okay, but it doesn’t get a high mark because it doesn’t address either debt reduction or lower unemployment.” 

Business Research and Development

The government’s decision to cut the tax incentive for business investment in research and development would hurt innovation, advisory firm Grant Thornton said.

Grant Thornton R&D tax expert Sukvinder Heyer said the move was “at odds” with the new tax concessions for small business.

“Innovation does not happen in isolation. It requires companies small, medium and large to be playing their part,” she said.

“Stable support is needed at all levels and this continued changing of the rules leads to uncertainty – the antithesis for encouraging investment.”

Queensland great barrier reef
The Reef is in danger of becoming a political football. Source: AAP

Environment

The government has focussed on immediate environmental problems in their budget such as handing out more than $400 million for Queensland drought relief and $100 million for the Great Barrier Reef

“What we’re seeing is not a  progressive, internationally aligned movement on climate change,” Dr Adam Bumpus, a Melbourne University academic specialising in climate change.

But overall we see “not much change to what we saw before,” he said.

He classed the budget as more of a holding pattern on big picture strategic items.

Large government organisations set up to tackle climate change like the Australian Renewable Energy Agency and the Clean Energy Finance Corporation continue to be funded at least for the short term, after the Energy white paper slated their removal.

“They’re on the chopping block, but they’re not chopped quite yet,” he said.

But the $100 million for the Reef was not seen as sufficient.

“The Australian Budget has fallen short in the funding needed to save the Great Barrier Reef,” said Gilly Lleyellyn, WWF-Australia Conservation Director.

If we want to protect places such as our World Heritage listed Great Barrier Reef and help our regional neighbours to have a more sustainable future, the environment needs to be made a priority in the budget.”

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