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Budget 2015 Special Report

Alex Downie went to Canberra to find out what the budget will mean for you.

Joe Hockey's head on Bart Simpson writing "I will not punish the poor" on chalkboard as punishment for being a bad boy

In last year’s budget, the Coalition articulated an expansive (if ill-advised) reform agenda. Tertiary education was to be deregulated, a generous paid parental leave scheme was proposed, and patients were to contribute to the cost of every GP visit.

This year’s budget is decidedly less ambitious. The few saving measures proposed by the Coalition have been calculated to cause the least political damage. Some of these policies – forcing graduates overseas to repay their student loans, and increasing the taxes paid by multinational companies like google – are probably well advised. Others, such as cuts to foreign aid, are ill-conceived and cruel.

Ultimately, it seems that the government is relying on creative accounting, and repetition of the phrase “credible trajectory back to surplus”, to distract from its failure to deliver on a key election promise. In this year’s budget, the government has done three quarters of a backflip – and landed flat on its face.

There’s a lot of content to sort through in Hockey’s second budget. Honi has focused on what will directly impact the lives of students and young people. Welcome to Abbott’s Australia 0.5:

 

Deregulation: don’t dream it’s over 

Joe Hockey has said that the Liberal Government is “absolutely determined” to bring its university reform policies back to the Senate. The contentious measures, which include deregulating university course fees and a 20% cut in government funding to universities, would substantially increase the amount of fees you pay to attend this university. They were rejected by the Senate last year.

If the Liberals bring the reforms back to the Senate, they are likely to fail, potentially triggering a double dissolution election. If the policy is not brought to the Senate, then the government will have banked on $3 bn of funding cuts that it hasn’t secured: meaning that the deficit is even larger than already estimated and further casting into doubt the Liberals’ “credible trajectory back to surplus”.

 

Research funding redirected to fund research

Last week, Chris Pyne proudly announced that he had secured a $150 million continuation in funding for the National Commonwealth Research Infrastructure Fund Strategy (NCRIS), a body that employs 1700 skilled and technical research specialists. When queried how he had found the money, Pyne told journalist David Speers that “I want it to be a surprise for you”.

Honi can now reveal that the government has funded the NCRIS by pulling $150 million from the 2016-17 budget of the Sustainable Research Excellence (SRE) programme. A treasury official told Honi that the SRE provides Universities including Sydney Uni with funding to cover associated costs of research. Meaning that the government has increased research funding by cutting funding to research. SURPRISE!

 

HELP: making it harder to dodge your student loans

Currently, Australians who move overseas are under no legal obligation to repay their Higher Education Loans Programme (HELP) debts.* That’s about to change. From 1 January 2016, graduates living overseas and earning incomes above the minimum repayment threshold ($A53,345) will be required to make payments towards their HELP debts.

This seems like a relatively harmless policy change. It will also have relatively little impact on the budget’s bottom line. It is forecast to save $26 million over the next four years – a saving which is 0.00074%** of this year’s deficit.

 

Work for the dole

This year, the government has proposed that people under 25 years old who are unemployed must ‘actively seek work’ for a four week waiting period before they can receiving Newstart (unemployment benefits) or Youth Allowance payments. This is a substantial backdown from last year’s (failed) proposal that new job-seekers under 30 should be unable to access Newstart  or Youth Allowance for six months.

The government has also backed down on previous changes which would have made welfare conditional on ‘working for the dole’. Instead, they will expand funding for a national wage subsidy program, which will basically pay employers up to $6500 to hire workers who are unemployed. It will also offer unemployed youth four week ‘work experience’ placements.

Still on the books: the government is looking to raise the minimum age requirement for Newstart from 22 to 25. This means a whole lot of unemployed young people will be forced to downgrade to Youth Allowance, which pays about $100 less per fortnight.

 

*The scheme that means that you don’t have pay your student debts upfront

** The projected deficit for the next financial year is $35 billion, and the projected savings from the project are $26 million over four years.

Vice Chancellor Michael Spence.

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