2019 Budget: Targeted initiatives alone won’t solve systemic problems

The 2019 Commonwealth Budget has invested in some promising social initiatives but done little to resource the structural reforms needed to significantly reduce disadvantage in Australia.

While funding effective services and programs is essential, unless the systemic issues that contribute to entrenched disadvantage are addressed we will, as a nation, continue to chase our tail.

Further investments in prevention are also needed and have incredible potential to change the trajectory of people’s lives. Effective preventative expenditure has been proven to lessen government spending on intensive and emergency social supports over the longer term.

Providing better supports for young children experiencing vulnerability, for example, will be key to ensuring future generations can break free from systemic disadvantage.

SVA CEO Suzie Riddell commented:

‘SVA believes that government support for social services should be evidence based and focused on achieving outcomes that make a real difference in people’s lives. This means looking at structural change as well as funding for targeted programs, and looking beyond the immediate spend to the likely economic and social impact of policy initiatives into the future.’

Infrastructure and social procurement

The $100 billion investment in infrastructure announced in the Budget presents a significant opportunity to consider the social, as well as economic, costs and benefits of major public projects.

The Indigenous Procurement Policy is a promising start in this area, particularly the extension to 3% of the value of Commonwealth contracts, but there’s scope for much more to be done.

For social procurement to deliver on its potential, government also needs to invest in helping social businesses build their capability to take on large contracts.

‘We invite the Government to embrace social procurement in its infrastructure and service expenditure and support businesses that are achieving social good through, for example, employing people who experience barriers to mainstream employment.’

Impact Investing

SVA is very pleased that the Government has allocated $5 million to establish a new Social Impact Investing Taskforce in the Department of Prime Minister and Cabinet – something SVA has recommended be established in a central agency.

Impact investing has the potential to help attract new investment to help solve social problems and our experience working with States and from research overseas suggests a central agency with the capability to work with investors and across Government is essential.

‘Private capital is never going to replace the need for ongoing investment by government in critical services, but there is scope for it to have significant impact in areas including affordable housing supply, social impact bonds and social enterprise development.’

The new investment of $14.1 million to trial three outcomes payment transactions is also a welcome addition to the social impact investing market.

SVA looks forward to working with Government as these initiatives are implemented.

Housing

Secure housing provides the platform for people’s wellbeing, and the delivery of social and affordable housing is one of the most pressing social problems in Australia today.

While it’s pleasing that the National Housing Finance and Investment Corporation has raised its first capital, there is no plan to replace the National Rental Affordability Scheme, or to encourage further investment in social and affordable housing.

Recent changes to Specialist Disability Accommodation are a positive step which could help boost investment in appropriate housing for people with a disability. It should be used as a template to consider driving investment in more social housing.

SVA is also concerned that there are no measures to address the rising incidence of older women experiencing homelessness; a problem that’s emerging from systemic factors like the gender pay gap, low superannuation balances among that cohort, and a lack of affordable housing.

Education

The extension of the National Partnerships Agreement to fund universal access to preschool in the year before school is essential and welcome given the strong evidence on the impact of high-quality early learning on children experiencing vulnerability. However, this largely represents the status quo.

‘There is much more scope to support children experiencing vulnerability through early intervention and prevention initiatives. Investing in effective prevention and early intervention would transform lives and deliver long-term savings to governments.’

Having committed to creating a National Evidence Institute to improve the use of evidence in schools, SVA urges the government to move swiftly to fund and implement the institute; the missing piece in the Australian education system.

We also encourage the government to incorporate models of peer-to-peer networks as part of future investments in professional development for teachers and school leaders. This approach, which was pioneered by SVA to help spread effective practices in low socioeconomic areas, already has great support in participating schools across three states.

Employment

To be a truly inclusive society, people of all ages who face challenges to participation must have opportunities to engage fully in work, study and training.

The employment system needs to be more adaptive to the needs of people experiencing the most entrenched barriers and focus on high-quality and innovative supports leading to long-term outcomes for job-seekers.

SVA is pleased that this Budget committed to trial a new pilot prior to reform of the wider jobactive system. This provides the opportunity to get the design right, utilising the best evidence about what works best to support people from all walks of life into jobs.

The additional investment in creating 80,000 new apprenticeships through the doubling of the employer incentive to $8000 and a $2000 payment to apprentices is also welcome.

Income Support Payments

The evidence is very clear that it is time for a rise to Newstart and that there would be economic and social benefits from such a move. There hasn’t been a rise in real terms for 24 years and it is now so low that people are unable to meet even their most basic needs from the payment.