Professor Kristy Muir reflects on the 2021 Federal Budget
There was a lot of welcome news for the Australian economy in the Federal Government’s 2021-22 budget announcement.
We once again earned our moniker of the ‘lucky country’, especially regarding our economic, health, and social recovery from a pandemic that continues to affect the globe. But of course, it’s not all ‘luck’. We witnessed the impressive power of what government policy and intervention can achieve. For example, we saw:
- A drop in rough sleeping (e.g. between Feb 2020 and Feb 2021 Sydney Street Count numbers went from 505 to 288);
- Improvement in housing stability with moratoriums on evictions;
- Social security increases which lifted people above the poverty line and enabled them to do the things many of us take for granted: eat three meals a day, buy more nutritious food for their children, pay debts, buy warm clothes and basics, like toiletries;
- Unemployment being curtailed by supporting 1.63m workers on JobKeeper (as at October 2020; with 1.54m still on JobKeeper by Dec 2020);
- Support for charities and other affected industries; and
- A public health system rally to keep us as safe and well as possible.
This is the definition of resilience: how we adapt and cope in adverse circumstances through internal and external supports. And we certainly adapted and ‘bounced’. Collectively, we weathered the storm and avoided falling off the cliff edge.
The “cliff edge” analogy has been used a lot over the last year. There was great fear about the impended uncertainty of falling off the cliff. The reality is that some people had already fallen off the cliff into stormy seas, even before the pandemic began. Who and how many more will fall off that cliff now that JobKeeper, JobSeeker and other supplements and supports have stopped is not yet known.
The recovery data suggests that the Australian economy “falling off the cliff edge” is far less likely than previously feared. And the government’s strong focus and aspirational target to bring unemployment rates to below 5% (with billions being invested into “creating jobs and rebuilding our economy”) is impressive and critically important.
Its $17.7bn funding response to the recommendations of the Royal Commission into Aged Care Quality & Safety over the next 5 years, along with its increase in support to veterans, investment in childcare, investment in mental health and telehealth, are also all very positive and important for society.
But there are 5 reasons I’m concerned and disappointed.
Before COVID, before the natural disasters, before the Black Lives Matter movement, we already had people who had fallen over the cliff into stormy seas without life rafts (1 in 200 homeless on any given night; little social progress despite almost three decades of GDP growth; stagnant wage growth; 2 in 5 families living in poverty have at least one working parent). We provided life rafts to (some of) them during COVID, but it wasn’t enough to get them to shore and enable them to climb back up the cliff and hang on. And from 28 March, the life rafts have deflated and we’ve missed an opportunity to make fundamental long-lasting societal changes. We have failed to:
- Improve economic and social outcomes by raising the social security rate: Groups from across society, industries and political perspectives (including the BCA) have long called for an increase in social security for people who need it and for the benefit to the economy overall. We saw an increase during COVID, but as of 1 April, social security rates were dropped by $50 in real terms. The current $44 a day is below the poverty rate and well below half the minimum wage.
- Help increase affordable, stable and secure housing: Having somewhere safe, affordable, stable and secure to live is well established in evidence