‘Just enough’, but not enough: The students’ guide to the Budget

Treasurer Jim Chalmers mentions young people twice in his Budget speech. They are only in the contexts of apprenticeships and Central Australia. In some ways, this Budget will lead to an improvement to the lives of students. Youth Allowance will increase, as will Commonwealth Rent Assistance. But that is about it. For every step forward in the Budget, there is a step back. International students will face a return to fortnightly caps on working hours, universities will pivot to AUKUS, and tax breaks for property investors are increased, not removed. The cost of living will continue to increase and students will be left unsupported. In all, this Budget represents a government that has taken our votes for granted. Here’s what’s in the Budget for students.

Higher Education

There are few promising changes to higher education in this year’s Budget. More funding has been promised for students with disabilities, students studying education and students studying at TAFE or VET providers. The increase in support for disabled students focussed on universities investing in assistive technologies, training for staff, and course modifications. The Government promised an additional 300,000 fee-free TAFE and vocational education places. They also announced an additional 4000 university places for education, with 1,972 assigned for primary and secondary teachers.

Additional Supported Places for AUKUS

The Government has announced support for 4,000 places at universities in STEM and management-related fields to support the AUKUS deal. These places are focussed on STEM and management fields including chemical engineering, chemistry, computer science, electrical engineering, management, mechanical engineering, mathematics, physics, and psychology. Eight hundred of these spots are set to be allocated to universities in South Australia over the next four years, as per a previously announced agreement between the Federal Government and the South Australian State Government. The remainder are set to be allocated based on “a competitive process.” Aside from the AUKUS places, the Government has not included funding for additional university places. A previous additional 20,000 Commonwealth supported places were announced in the October Budget.

Commitment to a Return to Working Hour Caps for International Students

International students will be faced with a return to a fortnightly cap on working hours from 1 July 2023. Whilst the cap previously existed, it was removed during the pandemic. The return was announced earlier this year, but committed to in the Budget, with an expansion from 40 to 48 hours per fortnight. This, in effect, prevents an international student from working more than three eight-hour shifts per week. An exemption for international students working in the aged care sector will remain until the end of the year.

Student Loans

The Government has announced no movement on HECS-HELP loans, which are set to be indexed at 7.1% after June 1. Instead, the Government has focussed on improving the administration of student loans and improving the security of student data. The Government will receive an additional $4.5 billion above what is already owed by students after this round of indexation.

The aspects of the 2023 Budget relating to higher education can be characterised by a sparse lack of detail. This uncertainty is indicative of a government which has its eyes on its upcoming Universities Accord. In the meantime, the Job-ready Graduates Package will remain in place and students will be burdened by thousands more dollars in student debt. Amidst rising HELP loans and a cost of living crisis, the Federal Government is leaving students behind.

Cost of Living

Welfare and Wages

The government is selling this as a cost of living budget. The $20 a week increase to welfare payments (including YouthAllowance and Austudy for students) for those under 55 is about as good as it gets for young people. The government has instead focussed on other demographics in many of the measures, explicitly providing improved treatment for older people. This is indicative of a government which treats young people as an afterthought, with there little in this Budget for students not receiving welfare payments, but still exposed to extraordinary cost of living pressure.

The government announced it is lifting the rate of Youth Allowance, Austudy and other income support, including JobSeeker by $40 a fortnight for those under 55, with many JobSeeker recipients aged 55 and over to receive a $92 a fortnight increase.

The government announced no changes to the “age of independence” (currently 22) for YouthAllowance; the age at which students’ eligibility for the payments is not tied to their parents’ income. Nor has it implemented improvements to the dysfunctional requirements for those under this age to be considered “independent”.

For students not eligible for these payment’s, the government’s submission to the Fair Work Commission that “real wages of Australia’s low-paid workers [should] not go backwards,” was the clearest way the government has moved to mitigate the cost of living crisis. Although, in that submission it stopped short of recommending that wages actually rise in line with inflation, resulting in an ultimately confusing stance.

Housing 

Housing policy received some attention in this year’s Budget, but not enough in the face of an ever worsening housing crisis. The government announced four new initiatives, with the Budget mainly revolving around Labor’s existing announcements regarding its upcoming Housing Accord and Future Fund (which is yet to pass Parliament), meaning many of the initiatives will not be particularly exciting for students.

The flagship proposal was an increase of the cap of Commonwealth Rent Assistance by fifteen per cent, the equivalent of $31 dollars a fortnight. The government says this is the biggest Rent Assistance increase in thirty years. Just over one million people will be eligible for the assistance, this includes people on the private housing market receiving selected welfare payments and those living in community housing. This is welcome, but clearly not enough in the face of rapidly rising rents.

Elsewhere, the government is increasing the amount the National Housing Finance and Investment Corporation (NHFIC) can loan providers of community housing by $2 billion. They are introducing tax breaks for investment funds managing “build-to-rent” housing. This comes in addition to the government’s recently announced expansion of the First Home Buyer Guarantee.

Climate

There is no fair future in Australia without adequately addressing climate change. Australia is at the forefront of the climate crisis, last year alone floods cost the federal government five billion dollars. As some of society’s youngest, students have the most to lose from climate change and thus, the most to gain from a Budget which takes meaningful climate action. Rhetorically the Albanese government agrees that more needs to be done: this Budget outlines a future vision of Australia where we are a “renewable energy superpower” that “encourages[s] business to invest in the path to net zero”.

It’s a pity then that the bulk of the commitments on climate change outlined lack ambition, hesitate on action, or are just pure rhetoric.

The government has announced many reviews — $12 million for a review of environmental management for offshore petroleum and gas storage, $6 million to develop a Future Gas Strategy and $103.7 million to review the Murray-Darling Basin Plan. They have also announced a National Risk Assessment and Adaption Plan, with a price tag of $28 million dollars. What new information this risk assessment could provide to the government remains to be seen. It will only guide the government in an advisory, not binding, manner. These reviews will likely tell a similar story: Australia is highly vulnerable to climate change and must stop all new coal, gas, and petroleum projects, and the government should introduce fiscal policies to encourage investment into renewable energy. We already know this.

One mechanism that the government argues will deter fossil fuel corporations is the reforms to the petroleum resource rent tax (PRRT). Resource rent taxes are taxes applied to companies working in industries where their income is dependent on finite resources, such as oil, gas, and minerals. These resources belong to the citizens of that nation — the company extracting the resources does not create the assets they profit from — and thus it makes sense to heavily tax these companies. Under this Budget the government has made significant changes, but they are not ambitious enough.  

Over four years, the changes to the PRRT would add $2.4 billion to the government’s wallet. In 2022, the gross profits of LNG exporters exceeded $63 billion. This tax reform is not enough to see corporations move away from investing in fossil fuels, nor does it promote the fair society that the Labor party seeks to build — corporations continue to rake in revenue, while they pollute the environment for everyone else. 

The Hydrogen Headstart program is the government’s main announcement regarding investment into renewable energy, with $2 billion dollars announced. According to the government, this program “will accelerate large-scale renewable hydrogen projects” and “bridge the commercial gap for early-stage projects”. This program will be introduced in 2026-27 and will assist in Australia transitioning to a nation less dependent on fossil fuel investments, albeit years late. 

These two major changes to climate policy are notable, however without strong reforms on how carbon-producing industries are taxed, and further investment into renewable energy these changes remain hollow and continue Australia’s legacy of a country that fails on climate. 

A budget dictates the future of a nation, and the future outlined by Labor in the Budget is one not made for the very people who will be living in it.

Students have been given “just enough” in this Budget, but not enough.

For more on these changes, and extended Budget 2023 coverage, click here.