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Budget balancing act fails working poor


A couple of weeks ago, Greens senator for South Australia Barbara Pocock shared an image over social media. The image was taken looking down a colonnade of square pillars beneath a building. On the flagstones there was clumped evidence of a homeless camp: blankets, shopping trolleys, mattresses, boxes. ‘Says it all really’, wrote Pocock in the photo caption. ‘People sleeping underneath the arches of the Reserve Bank this morning as I visit my old workplace before heading into an inquiry about ethics, governance and the regulation of the big end of town. Inequality stalks every city. It is on steroids in Sydney.’

People sleeping rough beneath the Reserve Bank strikes me as the perfect image to segue into a quick word on the budget. Last week’s federal budget, presented by Treasurer Jim Chalmers, comes at a time when Australia faces the dual challenges of high inflation and a weakening economy. Chalmers explained that the budget aimed to provide cost of living relief on the one hand and while energising a weak economy without further fuelling inflation. At first blush, it sounds reasonable, right? Who could have a problem with that? Turns out, anyone who trying to scrape by beneath the poverty line just might.

There’s a tendency to look at budgets in terms of winners and losers, and some have seen this budget as one that places Australians experiencing poverty firmly into the ‘loser’ category. 

I’ll say upfront: I’m not an economist or sociologist. Budget announcements don’t tend to get my heartrate up. So to get a better read on Labor’s balancing-act budget, this week I spoke with Associate Professor of sociology at ACU Dr Tom Barnes. For Barnes, this budget is largely a collection of short-term fixes rather than a comprehensive solution to the deeper economic issues facing Australia. ‘To call it half-cooked would be generous,’ he remarked.

While the intention behind the budget’s balancing act might be seen by some as commendable, when the focus shifts on to long-term structural problems that affect those in our communities who are less well off, its execution – or even its intention – leaves something to be desired. 

The budget does include several measures designed to provide immediate relief to the electorate, such as minor increases in rent assistance and other welfare benefits. But when you look at the details, Barnes says, ‘there’s very little to alleviate housing stress for the working poor. Rent assistance has gone up but only by $9 a week. There’s nothing in there to address the structural housing problems facing low-income earners in terms of lack of access to rental accommodation in general, particularly in the big cities.’

And while there was little on offer in the way of addressing structural issues underlying the housing crisis experienced by many Australians (with no measures addressing the lack of affordable housing or the need for substantial investment in public housing projects), one of the most glaring omissions in the budget was Jobseeker. 


'Australia currently has the lowest relative unemployment assistance for any country in the OECD. And wealth and income inequality has drastically increased since Jobseeker returned to pre-pandemic levels.' 


Unlike last year’s budget, Jobseeker went without any increase. This lack of movement is only more surprising when you realise it goes against the recommendations of the government’s own advisors. ‘Only a few months ago, there was hints that [the government] might do something,’ Barnes told me. ‘Their own advisory committee said that they needed to raise Jobseeker to at least an extra $120 a week,’ which would lift those on the payment a little closer to the poverty line, but still beneath it. ‘But instead, they offered absolutely nothing.’ 

Last year’s budget, with a proposed rise of $40 in Jobseeker per week, also fell short of what was required to address ongoing poverty. By contrast, the additional $550 per fortnight provided to Jobseeker recipients during the pandemic in 2020-21 temporarily doubled the Jobseeker rate and helped thousands of poor workers in Australia pay for basic essentials while boosting participation in the labour market.

And yet on Monday, when the Productivity Commission released their research paper A snapshot of inequality in Australia, they reported that the Coronavirus Supplement payments that drastically combatted income inequality were not ‘fiscally sustainable’ in the long-term. The Guardian’s Greg Jericho crunches the numbers and demonstrates the fallacy in claims like this one. It’s worth a read. To raise Jobseeker by $550 would cost the government less than the fuel tax credit.

In considering the government’s position on Jobseeker, it’s worth bearing in mind a couple of things: Australia currently offers the lowest relative unemployment assistance among OECD nations, and since Jobseeker payments reverted to their pre-pandemic levels, wealth inequality has sharply escalated. 

In making no additional changes to unemployment assistance, the government seems to be doubling-down on a system engineered to keep unemployed and precariously employed workers in poverty. ‘The ease with which government was able to mitigate poverty during the days of lockdown shows that the decision to keep household transfers low has always been a matter of political choice,’ Barnes says. 

Barnes’ critique underscores the need for a more ambitious and long-term approach to economic policy — one that prioritises structural reform, addresses root causes of inequality, and ensures that the benefits of economic growth are more equitably distributed. Without such an approach, the budget risks being seen as a place-holder for the status-quo. It fails to deliver any meaningful and lasting change because it was never meant to.

‘What you have is really a patchwork of remedial measures, which are really about the short-term political cycle, trying to shore up votes. If not winning votes directly, it’s about at least preventing votes from continuing to slip away,’ Barnes says.  

In light of the gains made in lifting people out of poverty during the pandemic, it seems critics are justified in viewing this year’s budget with more than a little disappointment. Again, I’m not an economist. But neither are the people sleeping beneath the Reserve Bank.

This situation brings us to a fundamental question about the federal budget: who are we really trying to serve? If those experiencing poverty don’t benefit, then who does?




David Halliday is editor of Eureka Street.


Topic tags: David Halliday, Budget, Poverty, Jobseeker, Australia, Jim Chalmers, Tom Barnes, ACU



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Existing comments

Thank you David for your thoughts on the 2014 Albanese Government budget.

Those who really do care about social justice in this country would have to agree with Dr Tom Barnes that it is “largely a collection of short-term fixes rather than a comprehensive solution to the deeper economic issues facing Australia. “

The ALP leadership praises itself by saying that it is concerned about the high cost of living for battling Australians, but continue to give billions of dollars of tax handouts to wealthy property investors who make it impossible for renters to buy homes.
Most renters were overlooked except a small number who got an extra measly $1.30 a day and there was no raise for those on JobSeeker.
In addition, while some funding has been provided to assist women suffering domestic violence those providing support say it is totally inadequate.

On the other hand, about $800 billion was earmarked for the grossly irresponsible and inappropriate AUKUS scheme with the construction of US nuclear-powered submarines.

It also gave about $50 billion in subsidies for the fossil fuel corporations burning making a mockery of the Government’s claim to be taking effective strategies to address global warming.

And politicians were given a $4,500 a year tax cut.

Jim Chalmers’ budget balancing act certainly fails the working poor.

And Dutton’s response shows that the LNP has no intention of proposing a serious alternative budget that looks after those in poverty or care of the environment. Their approach is to blame migrants for the problems while supporting the greed of the large banks, the large corporations , supermarket chains and property investors while promising us extremely costly nuclear energy!

After the next election, hopefully we will have more Greens and responsible and conservative independents in our federal parliament or we are going to see more Australians sleeping out as in Barbara Pocock’s photo and more coal and fracking ventures..

Andrew (Andy) Alcock | 26 May 2024  
Show Responses

May I clear up a mistake I made in my previous comment?
I meant to say "progressive independents " in my last paragraph instead of "conservative independents".

Heaven forbid, we need to have progressive politicians to counter the hidebound conservatives in the LNP and the ALP to care for people and the environment!

Andrew (Andy) Alcock | 27 May 2024  

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