IEU journalist Angus Hoy digs into what the budget means for members, finding more than one missed opportunity.
On Tuesday 6 October, Federal Treasurer Josh Frydenberg handed down the federal budget for 2020-21, after it was delayed from May due to the coronavirus pandemic.
The government is touting this budget as the nation’s path out of the worst recession in three decades, with more than $500 billion allocated to the task.
In this recession, women have lost jobs, hours of work and income at a faster rate than men. Yet among this unprecedented wave of spending and tax cuts, many analysts and observers, including the IEU, have criticised the unfathomable omission of support measures directed towards women.
Pink recession, blue recovery
Think tank Per Capita is among the many voices criticising the government’s failure to address the issues women face – identifying the measly $240 million commitment to women, as part of their “Women’s Economic Security Statement” as only 0.038 per cent of the total budget deficit.Analysis from another think tank, the Australia Institute, finds that the government’s headline budget policy, the income tax adjustment, will disproportionately advantage men over women, both now and into the future.
The Australia Institute’s analysis shows men will receive $3 in every $5 of tax benefit in this financial year, then $7 in every $10 of the benefit from next year on. This is because the primary beneficiaries of the tax cuts are high income earners who, in Australia, are disproportionately male.
Opportunity cost
The $16.9 billion spent on this early introduction of tax cuts has been labelled an opportunity cost. The tax cuts had already been announced before the pandemic and were scheduled to be introduced in coming years, but are now being touted as a targeted measure to create jobs amidst a devastated employment landscape.
But tax cuts are a remarkably inefficient way to create jobs, relying on taxpayers to spend the money rather than save it or pay down debt. Even so, the government claims the measures will create 50,000 jobs.
Calculations released by the Australia Institute reveal that, if that $16.9 billion had instead been invested evenly across the employment-intensive sectors of university education, childcare, healthcare, aged care and the creative arts, it would create 210,506 jobs. That’s 160,506 more jobs than the 50,000 the government claims the tax cuts will create.
Questions have also been raised as to whether that figure of 50,000 jobs is even realistic, and that the true number is likely to be far lower.
A disappointment
“In the midst of a recession, this budget is a disappointment,” said IEUA NSW/ACT Branch Secretary Mark Northam.
“It does nothing to advance universal access to early childhood education – an investment in our children that pays for itself and the strongest policy lever for women’s workforce participation. It’s also a missed opportunity to inject funds into TAFE.
“There’s a lack of support for universities while fees for humanities degrees are doubling.
“There is nothing for the arts, nothing for social housing, nothing to spur wages growth, and nothing for those aged 36 to retirement.
“We had hoped for a fairer, longer term vision.”
Right of reply
The IEU warmly welcomes Labor’s budget reply, delivered on Thursday 8 October by Opposition Leader Anthony Albanese.