Two weeks ago, on the 5th of May, the Labor government revealed its budget for this year. It’s an underwhelming budget, spending too little while worshiping the false gods of budget surpluses and tries to prove too much to the Coalition.
While most Australians lose out in a budget that still includes $313 billion in tax cuts for the rich, what has been particularly disappointing in this budget is the implicit assumption that Labor has the student vote guaranteed. Key issues around student living, the price of food, and HECS inflation have made national headlines recently, yet there was next to nothing in the budget for those at university.
The benefits and costs of this budget, from tax cuts for the rich to greater welfare for the elderly, foster intergenerational hostility and cement the divide between the young and the old, the poor and the rich.
Cost of living measures are not enough
At the heart of the budget is the cost-of-living package, and although the Treasurer has claimed that it “prioritises those in need”, what it really does is put band-aids on bullet holes.
The $14.6b cost of living package increases the base rate of government payments such as Job Seeker, Youth Allowance, Austudy, ABSTUDY, Youth Disability Support Pension by $40 per fortnight. This $20 per week increase, which is still below the poverty line, will apparently aid recipients against an average total weekly cost of living of $700.
In short, it doesn’t.
For a single student/apprentice aged 18 or above, with no children, living away from parents, the weekly Youth Allowance payment is $281.4, with the recent increase bumping it up to a total of $301. However, clearly it’s not an adequate increase since it’s resulting in $45 debt per week, and realistically no savings.
Not only is this increase woefully underneath the recommendations of advocacy groups such as the National Union of Students, which advised an increase of $88 per day, it also doesn’t align with Labour’s own advisory committee which recommended a payment of just under $1000 per fortnight.
Even still, the student budget displayed above assumes that students have a stable weekly income. Most students work part time or casual hours and have experienced growing uncertainty about the number of hours their employer can offer. This is in addition to many students’ study loads being equivalent, or near to, a full-time workload. These students are expected to choose between dedicating time to their education, or to paying their bills.
And although the budget increased the minimum rate for full time work, there were no changes made for the minimum wage for part time and casual workers–who are most likely to experience underemployment.
The cost of living package also increased the maximum rate for Commonwealth Rent Assistance (CRA) program by 15%, which is $31 a fortnight. This is against a back-drop of average rent being $1000 per fortnight for many students. Once again, for many renters, the increased payment has no substantial benefit.
The housing crisis is severely concerning, especially for millennial and generation-z demographics, who unlike their parent’s generations, are likely to stay renters.
There are several ways to correct the crisis, none of which the government addresses in the budget. Policies such as rental caps, reforms to investment property taxations which prioritise renters over the investor, increased renting rights, and adequate increases to CRA which acknowledge the generational inequality, would allow younger generations to finally leave the dark sinking hole that is the rental market.
In the midst of this crisis, what has become increasingly apparent is that neo-liberal thinking has installed inaction within this government, which has grown comfortable using inflation fear-mongering, and refusing substantial structural change. Severe under-investment in public housing and rentor’s rights, in addition to tax concessions which uplift the property investor over the renter, has created this housing crisis, not the ordinary mechanisms of an economy.
One of the few gains for students and one of the only investments into higher education was the chance to receive scholarships to study science, technology, engineering and/or mathematics (STEM) and management courses and degrees as long as they then help serve on the AUKUS nuclear submarines. Nothing suggests young people are cannon fodder than literally being put on the frontlines.
The details of the scholarship are hazy, it will fund 4,000 Commonwealth supported places across the country, with 800 identified for South Australia. Most Defence scholarships are lucrative, and some of the only ones that fully fund tuition. This scholarship may be the same, or it may provide less money. Regardless, it moves us one step closer to the kind of education system America has where students can get a free education by selling their bodies.
The policy strikes again at how the government conceives of tertiary education policy as a policy tool not to create an informed, critical society, but merely as the means to a job.
No budget contains everything under the sun, and HECS indexation may sit outside the exactitudes of the Budget. But it is disheartening to see so little movement on stopping the punitive indexation of HECS to the rate of inflation. For years, the wisdom behind indexation was that it was harmless, but meant people retained their debts.
However, more and more we see that it’s not harmless, but in fact with the cash rate having sat so low for so long, and inflation now increasing dramatically, the average graduate simply cannot pay off their HECS debt. In June, all current HECS debts will increase by 7.1%. Many students now find that they can be paying off their HECS debt, while inflation means that it continues to increase.
Despite the obvious problem of straddling younger Australians with a debt that will last them well into middle-age, Labor and the Coalition both rejected a Greens’ bill to stop indexation. Any working-class party should understand the crippling impacts of debt.
Stage 3 Tax Cuts: Inflation is not being caused by consumption
However, the most undiscussed disaster of this Budget has been its inaction on the Stage 3 Tax cuts. Labor has remained committed to the massive tax cuts for rich Australians since the Coalition first proposed them. Initially, it was believed that they would cost $243 billion over a decade. However, a recent Parliamentary Budget Office costings analysis, conducted by the Greens, finds that the tax cuts will amount a total of $313 billion over the decade, creating a more regressive tax system that benefits the rich, and punishes the poor.
Infact, with these tax cuts, those earning over $100,000 per annum will be better off, leaving 75% of income earners receiving no substantial benefit.
The tax cuts have always been a horrible idea. They will exacerbate an increasingly unequal Australian society, and remove billions in revenue. And although in his speech, the Treasurer declared that equality for women is a crucial objective, 65% of the benefit will be collected by men, who will receive $203.7bn over the decade, while women receive $109.4bn or 35%.
However, what is further concerning is that the tax cuts imply that the rich do not deserve to be taxed, when their wealth is created in conjunction with society and when many benefitted from the past use of public money, such as Whitlam’s free university. Intergenerational wealth, and inherited inequality, is already a structural issue, one that these tax cuts will exacerbate.
They are also simply a bad use of public money. Our government already struggles to provide for Australians, we cannot afford to lose those $313 billion worth of spending, when in comparison, providing free university for most people would cost only $6.9 billion per year, and increasing jobseeker payments to $958 a fortnight would cost only $75 billion over ten years.
By ignoring these potential spending opportunities, the incumbent government is making clear where its priorities truly lie; and it is with the top income earners much like themselves, who take on the smaller, often non-existent, end of the inflation burden.
The shift of Labor to the centre, marks the changing demographics of Western politics. Increasingly, the single largest determiner of which way someone will vote is whether they have been to university. Labor’s base is no longer the working-class which its neoliberal policies damaged, but instead it is university graduates, likely to end up left-wing, but still working in big business, and making a high income.
This budget has been dominated by a narrative around inflation. To begin, current inflation is not the result of high consumption, but of high company profits. The budget will not drive inflation just by spending money, because aggregate demand is not the main driver of inflation. However, giving tax cuts to the rich will mean they benefit more from their profiteering, which has contributed to inflation. We have collectively lost our minds when we let an unfair, poor choice of government funds pass that will cause inflation, while criticising the basic necessities that people need, that remain unlikely to touch inflation. Politics is won on narratives and despite the persistence and hard work of Labor at the moment, they’ve fallen prey to the Coalition’s narratives on national debt and inflation.
We acknowledge the Ngunnawal and Ngambri people, who are the Traditional Custodians of the land on which Woroni, Woroni Radio and Woroni TV are created, edited, published, printed and distributed. We pay our respects to Elders past and present and emerging. We acknowledge that the name Woroni was taken from the Wadi Wadi Nation without permission, and we are striving to do better for future reconciliation.