Budget 2020: Inclusive recovery at risk as Australia’s community builders sidelined

Australia’s charities have been left out of the major investments in the budget despite employing one in 10 workers and providing vital services that will be crucial for communities to build back better.

While the Government has recognised the need to boost demand in the economy, its focus on business as the key to post-Covid recovery risks leaving many people in Australia behind.

Modelling by Social Ventures Australia (SVA) and the Centre for Social Impact has shown that without additional assistance 180,000 jobs could be lost in the charities sector by September next year, even with JobKeeper running to March 2021.

Instant asset write-offs, tax incentives and tax carrybacks give a leg up to the private sector but these measures do not help charities, or the people and communities they support.

‘Australia’s charities stand ready to partner with the Government to build a thriving and more resilient society,’ says SVA CEO Suzie Riddell.

‘We encourage the Government to look again at the long-term reforms the sector needs to thrive when it considers measures for the next budget in a few months time.’

SVA acknowledges the targeted initiatives to support people experiencing vulnerability, such as support payments to pensioners, Family Tax Benefit recipients and health care card holders.

However, we are disappointed that the Government has chosen not to pull some of the major levers that would stimulate the economy and materially improve people’s wellbeing – confirming a permanent increase to the JobSeeker and Parenting payments, investments in new social and affordable housing, and support for First Australian organisations and communities.

‘The Government’s decision in March to almost double the unemployment benefit was a strong force for good – it lifted people out of hardship, provided families with sufficient income for food and bills.

‘And as low income earners are more likely to spend the additional money, it was an efficient and effective stimulus,’ says Suzie Riddell.

‘We’d like to see a higher rate of payment continue and for the Government to act soon to provide certainty for recipients and the community.’

Employment and training for young people

SVA is pleased that the Government has recognised this as a critical time for young people with their announcements of encouraging initiatives to support them into the workforce, but there is more to do.

Young people who entered the labour market following the Global Financial Crisis (GFC) are still suffering the consequences of poorer employment outcomes, working in jobs that don’t use their skills, and having lower incomes. Given we are now facing an even larger crisis, the response must be correspondingly large.

We welcome the introduction of the Boosting Apprenticeship Commencements wage subsidy, but are concerned about the implementation and impact of this program. The subsidy’s length (due to run out in September 2021 despite apprenticeships taking several years to complete) and its size (limited to 100,000 meaning the cap could be reached before many hard hit employers are sufficiently confident to recruit new staff), are worrying factors.

We encourage the Government to monitor take up of this program closely and be ready to make adjustments quickly to make sure that it reaches employers and jobseekers that need it the most.

SVA is pleased with the announcement of wage subsidies for employers who hire young people under 35. However, this measure may not be sufficient to deliver the Government’s forecast 450,000 jobs. Wage subsidies, including for young people, have been a long standing feature of the employment system but have not previously been able to deliver at the scale indicated here.

The inadequacy of wage subsidies is particularly true for those in remote areas so we are also disappointed that we did not see a specific response to the ongoing challenge of employment in remote communities.

Supporting young children

Ensuring that all children have what they need to thrive in the early years and beyond is central to building a strong future for Australia, and this challenge has only been intensified by Covid.

Investments in early childhood pay significant dividends, both for happier healthier children and in reduced costs to governments, but they are largely absent in this budget. Without such investment, we can expect the estimated $15.2 billion cost of late intervention for children in crisis to continue to rise.

SVA believes that permanent increases in income support for parents, particularly single parents, should be part of any announcement about the future of JobSeeker given its effectiveness in reducing childhood poverty.

We welcome the ongoing supports for Victorian early childhood education and care services as they try to support families through the midst of this crisis. The continued easing of the activity test requirements for families whose employment has been impacted by Covid-19 is also critical to ensure that children are not precluded from access to early learning because their parents have lost work.

Education

SVA has been an advocate for many years for the creation of a new national evidence institute to ensure that teachers and educators in schools and early learning centres have access to the best available evidence to improve learning. We are therefore concerned that there is no allocation in the budget for this institute, despite public commitments from the Commonwealth Government to co-fund it with the state governments for $50 million over four years.

This institute is a missing piece in our national education ecosystem and its role in supporting better education outcomes will be even more important in the wake of Covid. We hope that the Commonwealth will provide clarity about the institute’s funding commitments quickly and work with the States to expedite its establishment.

Impact investing

While there are no new measures to support Australia’s growing impact investing sector, SVA eagerly anticipates the release of the final report from the Prime Minister’s Social Impact Investing Taskforce and the Government’s response.

We hope to see new announcements from the Government in the near future to help boost Australia’s impact investing sector. While private capital cannot replace the need for ongoing investment by government in critical social services, we believe impact investing has the potential to support our communities to achieve better outcomes for their people.

Housing

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

We are disappointed there is no plan to replace the National Rental Affordability Scheme, or to encourage further investment in social and affordable housing, as investment in the latter has been a successful strategy in the past to create jobs during a downturn and provide badly needed social infrastructure.

The extension of the National Finance and Investment Corporation mandate by nearly $1 billion is welcome, but further measures will be needed to unlock significant private capital and the Government should look at this in conjunction with its impact investing strategy.

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