Headed in the right direction, but very slowly

Tony Reidy calls for the Abbott Government to get serious about reform

ON the face of it, the 2015-2016 Federal Budget is moving in a better direction.

Unfortunately, it is piecemeal movement.

Changes to child care and pensions have the potential to make some difference to the lives of Tasmanians living on low incomes.

However, key features of the child care proposal leave the changes unbalanced and unfair, while also making cuts to family payments for low-income families, and providing overly generous subsidies to families on high incomes.

Many children in low income families will lose 12 hours a week of early childhood education that helps improve their life chances. Meanwhile, the Paid Parental Leave scheme change comes out of the blue and takes us backwards in the search for short-term savings.

We welcome the doubling of incentives for small businesses to increase employment of job seekers, and measures to increase employment in Tasmania, especially among youth, indigenous and long-term unemployed. These are moves in the right direction. However, this program has been shockingly underused to date, indicating it may not be the solution required.

There is little in the Budget that speaks to long-term thinking and future planning.

The four-year National Partnership Agreement for Adult Dental Health has been replaced with a one-year commitment with no vision for providing this much-needed service in the longer term.

This lack of commitment on the Government’s part is consistent with its approach to funding of community service organisations. Many were left unsure of funding until just two months before it was to run out. When renewed funding did come to some, it was guaranteed for just 12 months.

No organisation or business can function efficiently and effectively in a climate of ongoing funding uncertainty.

Overall, Tuesday’s Budget retains many harsh cuts from last year’s and will leave many people on the lowest incomes worse off. While the Government has charted a different path from last year’s divisive and unfair Budget, the shadow of it remains.

On the part pension, we strongly support the reforms to the assets and income tests and applaud this change in direction. We now need a similar approach to superannuation reform, which is equally important in building a strong and durable retirement income system. We must get value out of super tax concessions, the benefits of which remain unfairly skewed to highincome earners. Super remains unfinished business.

The Government’s Youth Employment Strategy is a move in the right direction. Investment in school-to-work transition programs to help vulnerable unemployed young people shows the Government has listened to community concerns about the ending of the Youth Connections scheme. Regrettably, instead of entirely reversing last year’s proposal to make young unemployed people wait six months for income support, it is reduced to one month and applied to a younger cohort (under 25). There is no justification for this measure, particularly for this cohort that is least likely to have savings.

The Budget leaves gaping holes in the social safety net. Missing in action is any fix to the low rate of allowance payments and the indexation of allowances and family payments (which are still indexed to the CPI only), and the continuing lack of investment in affordable housing, and the loss of funding for vital policy, advocacy and service delivery across social services, health and legal assistance and in Aboriginal and Torres Strait Islander communities.

The community is looking for leadership from the Government to deliver structural reforms in crucial areas of public priority — jobs and skills, health, community services, and retirement incomes.

Tax reform must be the next priority for responsible, fair and measured action.

This Budget should have begun work to safeguard the social safety net into the future by trimming unfair tax concessions for super and reforming negative gearing and capital gains tax breaks.

Now is the time for the Government to lead a staged reform process to secure a sustainable revenue base and enable investment in essential social and economic infrastructure.