Support to individuals and a net surplus were the key themes advertised in this year’s 2012-2013 Federal Budget.
The plan was described as a Robin Hood budget due to particular redistributive policies, and has attracted both praise and criticism from stakeholders.
The budget allocated 1 billion in spending over four years to establish a new National Disability Insurance Scheme (NDIS), as part of a response to Productivity Commission findings that the current disability systems are underfunded, unfair, fragmented, inefficient and uncertain.
Youth Allowance, Newstart Allowance and other income support program recipients were also appropriated with $210 annual supplementary allowance, which will start in March 2013. Some argued that the supplementary allowance does not sufficiently provide individuals with the means to generate income above the domestic poverty line.
A Schoolchildren’s Bonus program, providing $410 to primary students and $820 to secondary students for books, uniforms and other school costs, was proposed as a substitute to the Government’s education tax refund.
The budget simultaneously pared down spending on several line items to achieve a minor 1.5 billion net surplus for 2012-2013.
Primary and secondary school funding was cut by 83 million over the next four years, despite recommendations in a recent report by David Gonski that substantial increases to school funding were desperately needed.
“Australia’s schooling system needs to help ensure that the targets for students attaining Year 12 or equivalent qualifications are met and that students leave school with the skills and capacities required to actively participate in society,” the report said.
“Public schools cannot continue to rely on one-off programs which have a limited life,” Australian Education Union president Angelo Gavrielatos said, according to local news.
A commitment to invest 8 billion, or 0.5 per cent of GDP, in annual expenditure on foreign aid by 2015 was also delayed to the next budget year. The Foreign Ministry currently plans to allocate 70% of its foreign aid expenditure to the Asia Pacific region by 2015-2016.
“Australia’s aid program saves lives, and it could save more lives more quickly without these cuts,” Oxfam executive director Andrew Hewett said, according to local news sources.
Meanwhile, plans to cut the company tax rate by 1 per cent from 30 per cent, which would have reduced annual tax revenue by 3.6 billion, were also scrapped. Instead, small businesses were offered minor tax deductions for vehicles and assets under $6,500.
Defence spending was cut by 5.5 billion over the same time period, representing a reduction of 1,000 staff. The Australian Security Intelligence Organisation (ASIO), which is constructing a new 1,800-member Central Office in Reid, has also been instructed to halt further growth.
Inflation adjusted funding for higher education and research remained unchanged. A response to last year’s Base Funding Review, which found that teaching costs currently exceed funding in most disciplines, is expected after a report on math and science participation from Chief Scientist Ian Chubb.
Arts funding was cut by 70 million annually, although an upcoming National Cultural Policy is expected to reformulate the funding criteria for cultural spending in future years.