SOCIETIES that are more equitable – ones with a smaller gap between the least well off and the most well off – have better economic outcomes overall.
This disproves the myth that we have to fix budgets first and fix social issues second. Real economic success is created in conjunction with a more equal society. Equity and justice are the foundation of a strong economy.
For this Federal Budget to be an economic plan for the future, as the Treasurer suggests, it must pass the equity test. Whether or not it has is crucial for Tasmania because we face the biggest challenges on social and economic measures. For us to do well overall, we must lift everyone’s prospects.
To actively promote equity and deliver a more just Tasmania, we needed to see two things in this budget: a reining in of the unfair benefits and preferential treatment of those at the top and improvements to foundational elements for those doing it hardest. Conveniently, money saved on the first can be reinvested in the second.
But that’s not what we saw in this budget. Instead there was a piecemeal approach. Good progress was made on reducing the extremely generous tax treatment of superannuation for the very wealthy and a commitment was made to get multinational corporations to pay some tax. But the money raised through these measures was not reinvested in developing a strong foundation for those doing it toughest. Instead, it was given away as tax cuts to those on higher incomes.
Other opportunities to increase fairness were ignored, such as fixing negative gearing and capital gains discounts.
Jobs and growth, a phrase we heard so often from the Treasurer on budget night, do not exist in a vacuum of social circumstances. Trickle-down economics (helping those at the top do better so benefits flow to everyone beneath) has been thoroughly disproved. To deliver better outcomes for the whole community we need to actively invest in equity.
The best example of this kind of investment in this Federal Budget was the youth employment initiative Youth PaTH, replacing the discredited Work for the Dole program. Youth PaTH aims to deliver support to young people and employers. It has potential to create jobs and deliver meaningful employment outcomes. Investing in this initiative proves this Government knows that people must be supported, not punished into employment.
In boosting participant income support payments, it also demonstrates that the Government understands that inadequate payments are a barrier to employment. Which begs the question, why aren’t they applying this thinking to all unemployed Australians?
Sadly, Youth PaTH is the exception that proves the rule on equity in this budget because we also see gaps and cuts across a range of fundamental areas: nothing for affordable housing, nothing to address unfeasibly low Newstart and Youth Allowance payments, the abandonment of the Gonski model of education funding, cuts to aged care, cuts flagged for the higher education sector, no funding security for homelessness services beyond 2017, delays to the introduction of new childcare benefits, and the removal of the energy supplement for new welfare recipients.
Tasmania needed considerable investment and change in the following key areas: an education system that delivers opportunity by supporting all kids according to their needs; a well-resourced health system with more investment in preventative health; and a welfare system that is a true safety net, supporting people back into work by providing a basic standard of living. These are the social circumstances that will drive employment and economic success.
Frustratingly, in each of these areas this budget fell short, and in others it took us backwards. Axing funding for community legal centres, youth mental health services, and dishonouring back-pay owed to Australia’s thousands of carers will increase inequity and suffering. Cutting over a thousand jobs in the department that administers our social security system will make it harder for people to get help when they need it.
The concept of equity tallies with the instinct for a fair go that lives in the heart of Australians. We value a society in which everyone has a chance to thrive.
The Treasurer talks about the need to live within our means. I reject the idea that living within our means as an Australian community means some of us cannot access a basic standard of living, have our basic health needs met, or escape from entrenched poverty through the opportunity of education.
We are wealthier as a country than we have ever been. The problem lies with our Government’s priorities, not our bottom line. We have the means. We must choose to allocate them more fairly.
This Federal Budget failed the equity test, and in doing so failed Tasmania.
Meg Webb is manager of the Social Action and Research Centre at Anglicare Tasmania.