Health
Amanda Biggs, Rebecca de Boer,
Dr Rhonda Jolly and Dr Matthew Thomas
Social Policy Section
Introduction
Broadly, this Budget is aimed at meeting election commitments, such as
the funding of promised health and hospitals reform measures, the establishment
of GP Super Clinics and a range of preventative health measures. To meet
these election promises, funding has been drawn from future surpluses,
the excise on so-called ‘alcopops’ (expected to generate $3.1 billion)
or redirected from programs funded by the previous government. This Budget
also outlines significant changes to the framework in which future Commonwealth
health funding will be provided to the states, by reducing the number
of Specific Purpose Payments and introducing new national agreements.[1]
Although the proposed changes to the Pharmaceutical Benefits Scheme (PBS)
failed to generate significant media attention, the shift towards full
cost recovery for the listing of products on the PBS and the National
Immunisation Program (NIP) represent a dramatic shift in government policy
and how the PBS operates. Another under-reported shift in health policy
is the means-testing of the subsidy for insulin pumps, to be used in the
treatment of type 1 diabetes (T1D). This is the first time in the 60-year
operation of the PBS that a listed item will be subject to means-testing.
One of the implicit policy objectives of the National Medicines Policy
and the PBS is universality of access on the basis of need, rather than
capacity to pay.[2]
Given that a number of significant reports in recent times have emphasised
the need for innovative thinking about ways to improve health workforce
recruitment and retention, it is disappointing that the Budget did not
make provision to explore such options. 
Savings and realignment of other funding
Amanda Biggs
Social Policy Section
A number of existing health programs identified as underperforming, duplicating
or ‘not doing the job’ have had their funding significantly reduced in
order to fund other budget initiatives.[3] Significant savings have been made in areas affecting
general practice ($244 million), the private health insurance rebate ($299
million), clinical training for nurses ($169.9 million) and advertising
campaigns ($50 million).
Arguably not all programs identified for savings are without merit. For
example, the GP Immunisation Services Incentive Payment, identified as
a saving of $83.7 million, is paid to GPs as an incentive for the completion
of a childhood immunisation. It has helped achieve immunisation rates
of 90 per cent in general practices around Australia. The government argues
that this incentive payment duplicates existing immunisation incentives
and initiatives.[4] There may be a risk that by removing
this duplication other immunisation efforts may be undermined. Some have
also warned that the cuts to general practice programs such as this one
may exacerbate tensions between the government and some doctors’ groups.[5]
Health and Hospitals Reform
Significant reforms to health and hospitals were announced prior to the
election, as part of Labor’s promise to end the ‘blame game’. Further
funding announcements, notably $600 million in funding to the states and
territories to reduce elective surgery waiting times, and significant
spending on the nursing workforce have been made in recent months. This
Budget also announces the establishment of a $10 billion Health and Hospitals
Fund, to support investment in health infrastructure, medical equipment
and research. The Health and Hospitals Fund, to be supported by budget
surpluses and established by 1 January 2009, replaces and expands the
previous government’s Health and Medical Infrastructure Fund.[6]
Full details are yet to emerge as to how projects will be assessed for
funding, other than as part of each year’s budget process. This lack of
detail has raised some concerns that such a large fund could be used for
other purposes, such as to fund future election commitments.[7]
Preventative health and chronic disease initiatives
The Budget provides significant funding to meet a range of election commitments
in the preventative health and chronic disease prevention areas. Significant
funding has been allocated to: the Healthy Kids Check for all four-year-olds
($25.6 million), cancer and cancer screening ($173 million), a range of
initiatives to tackle obesity ($62 million), binge drinking ($53.5 million)
and tobacco ($29.5 million), support for perinatal depression ($55 million
from the Commonwealth with $30 million to be sought from the states and
territories), closing the gap on Indigenous health ($334.8 million) and
support for dental health ($780.7 million). The increased excise on so-called
‘alcopops’, expected to raise some $3.1 billion in revenue, will help
fund these initiatives, but the Coalition has claimed that the tax will
fail to reduce binge drinking.[8]
Dental initiatives
The dental health funding is significant as it marks a more direct role
for the Commonwealth in funding dental health. During the 2007 election
Labor promised to redirect funding from the existing Medicare Allied Health
and Dental Care initiative for people with chronic conditions to two new
dental programs and also to fund the James Cook University’s dental school.
This Budget allocates $780.7 million for these initiatives. Funding of
$290 million over three years is to be provided to the states and territories
to clear public dental waiting list backlogs (estimated at 650 000).
Although priority is still to be given to patients with chronic conditions,
the National Oral Health Plan specifies that equal priority be given to
other disadvantaged or vulnerable groups.[9]
One problem that may affect the capacity to reduce waiting lists is the
shortage in the dentistry workforce, particularly the public dental workforce.
It has been estimated that by 2010 there will be 1500 fewer oral health
providers than will be needed just to maintain current levels of access.[10]
The Budget also provides $490.7 million for the Teen Dental Plan, due
to commence on 1 July 2008. This means-tested initiative, paid through
Medicare, provides for up to 1.1 million eligible teenagers (aged 12 to
17 years) to receive assistance of $150 per year for a dental checkup.
While previous Medicare arrangements for dental services targeted specific
population groups, the focus has remained firmly on clinical need, not
socio-economic status. This means-tested application of Medicare represents
a shift from a model that has previously provided universal access based
on clinical need.
Medicare levy surcharge changes
The Medicare Levy Surcharge (MLS) is an additional 1 per cent surcharge
on top of the 1.5 per cent Medicare levy on taxable income which helps
fund Medicare. Introduced in 1997, the MLS applies to those on incomes
over $50 000 (individuals) or $100 000 (couples) without private
health insurance. Some 465 327 individuals paid the surcharge in
2005–06, raising around $289 million in taxation revenue.[11] The government proposes to raise the MLS thresholds
(which have remained unchanged) to $100 000 for singles and $150 000
for couples. The measure is expected to generate savings in the form of
reductions in government rebates for health insurance premiums, resulting
in $299.2 million in savings overall.[12]
The changes to the MLS have attracted criticism. The Australian Health
Insurance Association (AHIA) and the Australian Medical Association (AMA)
have expressed concerns that the changes will lead to an exodus of members
from private health insurance and strain the already stretched public
hospital sector.[13] Not
all in the private sector agree; the Australian Private Hospitals Association
described the likely effects of the proposed changes as ‘greatly exaggerated’.[14]
While the government has conceded that it expects some 485 000 people
may elect to drop their private health insurance as a result of this measure,
claims of a mass exodus and its possible impacts on the public hospital
system have been questioned for a number of reasons.[15]
First, the decision to purchase private health insurance is not based
solely on avoiding a tax penalty. In addition to the MLS, there are other
incentives that encourage private health insurance membership—notably
Lifetime Health Cover and the Private Health Insurance Rebate. It has
been pointed out that when the MLS was introduced in 1997 it failed to
halt declining private health insurance membership. This decline was only
reversed from 2000, following the introduction of the other two health
insurance incentives.[16] Furthermore, other factors influence
a decision to purchase health insurance, including personal preferences
and incomes. According to one industry executive, ‘the most important
drivers’ of private health insurance membership, along with government
incentives, are rising incomes and falling confidence in public hospitals.[17]
Secondly, it has been argued that those who purchase health insurance
to avoid the penalty of the MLS tend to be young and healthy. They purchase
the cheapest products with high co-payments (or front-end deductibles)
and continue to use public hospital services to avoid these high co-payments.[18] If so, this suggests that their
opting out would not place an additional burden on the public hospital
sector and therefore the negative impact may be less than some have claimed.
Regardless, the assumption that the young will opt out may not be correct.
Other penalties, such as the higher premiums for health insurance that
are faced after the age of 31, may well prove a disincentive to dropping
private cover for those aged over 30.
If there were to be a decline in membership of younger healthy members,
it may add pressure to premiums as funds seek to reduce their costs. But,
in an indication that the health insurance industry does not envisage
any longer-term damage, the proposed acquisition by BUPA Australia of
the heath fund MBF is set to proceed, despite the announced changes to
the MLS.[19]
Pharmaceutical Benefits Scheme
Rebecca de Boer
Social Policy Section
Over the past 18 months, the operation of the Pharmaceutical Benefits
Scheme (PBS) has undergone significant policy change. The previous government
introduced the ‘PBS Reform Package’ in late 2006 with a staged implementation
model (with Stage 2 to be implemented in August 2008). There are two budget
measures which will be of particular significance to the operation of
the PBS—the move to cost recovery for evaluation and listing on the PBS
and the decision to reduce the funding for the generics medicines awareness
campaign. Other PBS measures include the listing of several high cost
drugs on the PBS and the subsidisation of insulin pumps, to be used in
the treatment of type 1 diabetes (T1D).
Cost recovery for listing of products on the PBS and NIP
The shift towards cost recovery of the administration of the Pharmaceutical
Benefits Advisory Committee (PBAC), the Committee which advises which
drugs should be subsidised, and the system of listing drugs on the PBS
is expected to generate additional revenue of $7 million over four years,
with a net cost of $2.2 million.[20]
This measure was first announced in the 2005–06 Budget, with a proposed
implementation date of 2007–08 (later set for 1 July 2007 and then 1 January
2008). At the time, there was widespread concern about the introduction
of this measure with concerns that it may undermine the independence of
the Pharmaceutical Benefits Advisory Committee (PBAC) and possibly result
in manufacturers declining to list products on the PBS (especially for
low volume products).[21]
Although described in the budget papers as an election commitment, it
has not been possible to locate the introduction of cost recovery to Pharmaceutical
Benefits Advisory Committee (PBAC) processes in the ALP election platform
or other health policy documents. Furthermore, during the parliamentary
debate about the legislative change package associated with the introduction
of the PBS Reform package in 2007, Nicola Roxon noted:
The PBAC needs to be independent of government and of
industry, and we cannot see the justification for this move to the cost-recovery
model.[22]
It would appear that the introduction of cost recovery arrangements therefore
caught the pharmaceutical industry by surprise.[23] In addition, there are fears
that this measure could undermine the independence of the PBAC and result
in higher drug prices to consumers.[24] As it will be necessary for the industry to
recoup these additional costs, it may lead to higher prices for pharmaceuticals
and a subsequent increase in cost to government. This was acknowledged
by senior Department of Health and Ageing (DoHA) officials during a Senate
Estimates hearing in 2005.[25]
DoHA has argued that as the Therapeutic Goods Administration (TGA) operates
under cost recovery arrangements, it is a ‘logical extension’ for the
PBAC to operate under the same arrangements.[26] However, the TGA and PBAC have vastly different
roles: the TGA determines whether a drug (or medical device) can be marketed
in Australia whereas the PBAC recommends to the Minister which drug should
receive public subsidy on the PBS and which vaccines should be publicly
funded under the National Immunisation Program (NIP).
In this context, the role of cost recovery is questionable. Although
cost recovery arrangements for the TGA and for the evaluation of prostheses
for listing on the Medicare Benefits Schedule exist, it is difficult to
compare these with the proposed arrangement for the PBS.
Cost recovery arrangements for prostheses were designed to reduce expenditure
on prostheses which had been increasing significantly.[27] In this budget measure, cost
recovery arrangements are being introduced to ‘offset the additional costs’
associated with evaluating and listing new products on the PBS.[28]
Given these vastly different objectives, comparisons between the two are
difficult, except to note that pharmaceuticals are widely used in the
community and the PBS (including the listing process) is an integral part
of the delivery of timely and affordable access to medicines.
According to the Productivity Commission, cost recovery arrangements
should only be introduced to ‘improve economic efficiency’ and ‘cost recovery
should not be implemented where … it would be inconsistent with policy
objectives’.[29] This
view is also echoed in the Australian Government Cost Recovery Guidelines.[30] Subjecting assessment of medicines
to cost recovery in order to increase economic efficiencies may undermine
government health policy objectives in relation to timely and affordable
access to essential medicines. As the primary focus of the PBS is ‘timely
and affordable access at a cost the community can afford’, charging companies
for the products to be listed on the PBS may lead to delays in listings
and higher drug prices for government.
Leaving aside the policy and regulatory arguments, the proposed implementation
date of 1 July 2008 puts considerable pressure on DoHA, the pharmaceutical
industry and the PBAC. Although DoHA has released a Frequently Asked Questions
document explaining the changes, it has not released the associated charges
or the proposed consultation strategy.
In addition, an unintended consequence of this policy may be that it
will now become more difficult for non-industry bodies to apply for products
to be listed on the PBS. There are no restrictions on who can make a submission
to the PBAC. In order to be considered by the PBAC, submissions must fulfil
the technical requirements. It may be difficult for clinicians or patient
groups to raise the necessary funds to not only prepare the submission,
but also to have it considered by the PBAC. The proposed cost recovery
arrangements may therefore well act as a barrier to their applying.
The PBS Reform package was expected to save the government more than
$580 million.[31] A key
feature of the PBS Reforms, and indeed, a key factor in the predicted
savings being realised was the increased usage of generics. It is with
interest to note that the proposed generics medicine campaign designed
to promote the use of generics to prescribers and consumers and to be
implemented as part of the PBS Reform package will be reduced from $20
million to $5.1 million, to be spent before the end of this financial
year.[32]
When the government was first considering the generics awareness campaign
it was ‘expected to comprise print, radio and television advertisements,
which promote the safety, health and economic aspects of generic medicines’.[33]
The decrease in funding will curtail the extent of the advertising campaign
and potentially limit its effectiveness. It will also limit the information
available to consumers about the benefits of generic medicines.[34] This may have flow-on effects to whether the
full extent of the savings might be realised from the PBS Reform package
and may result in unnecessary expenditure by consumers. It has been noted
by the Generic Medicines Industry Association that last year consumers
paid a premium for medicines which had a generic equivalent for over 28
million prescriptions.[35]
New drug listings on the PBS
This Budget also extended the listings of many products that were already
listed on the PBS, as well as introduced the listing of Naglazyme® (galsulfase)
to assist patients with a rare, debilitating enzyme deficiency called
Maroteaux-Lamy Syndrome. Notably, insulin pumps for young people with
T1D will be subsidised on a means tested basis. As noted in other parts
of this section, the means testing of subsidies is a shift away from universal
access based on clinical need.
Insulin pumps
The Budget provides $5.5 million over four years for means-tested subsidies
on a sliding scale towards the cost of insulin pumps for people with T1D
under the age of 18. Those receiving the maximum subsidy of $2500 will
need to pay at least that amount again for the most basic model of insulin
pump. The measure does not take into account other people who may have
a clinical need for an insulin pump and need support, including young
adults with T1D and women with gestational diabetes. The budget papers
do not indicate how much of the funding will be provided to Centrelink
to ‘administer the means testing’.[36]
Aged Care
Rebecca de Boer
Social Policy Section
The previous government introduced significant changes to the aged care
sector as part of the 2007–08 Budget. Many of the changes, such as the
Aged Care Funding Instrument, have been retained by the Rudd Government.
This Budget announced a range of measures for the aged care sector including:
- additional transition care places
- increasing the level of the Conditional Adjustment Payment (CAP)
- $300 million in zero interest real loans
- increasing the nursing workforce in residential aged care and
- a commitment to regularly reviewing the aged care planning ratios.
These budget measures have failed to generate significant commentary.
The Aged Care Industry Council ‘expressed relief’ that there were no significant
cuts to the aged care sector and were relieved that the CAP was extended.[37]
Other peak lobby groups have focussed on the gaps between the cost of
living and the aged pension rather than the budget measures per se.[38]
As has been a recurring theme in the analysis of the Budget, many of
the aged care measures reflect either election commitments or announcements
made prior to the Budget (for example, the Ministerial Council on Ageing,
the appointment of an Ambassador for Ageing, zero real interest loans
and additional transition aged care places).
Earlier commentary in this brief has noted that it is disappointing that
this Budget did not make any meaningful contribution towards addressing
the significant health workforce challenges. An extra (up to) 1000 nurses
over five years in the residential aged care sector will do little to
address the declining workforce and pay disparities in the sector or the
broader challenges facing the aged care workforce.
This initiative is part of a broader measure to encourage 8750 qualified
nurses to return to the workforce and to create 90 new Commonwealth supported
university places in nursing in 2008 and 2009.[39] Unless these places are specifically
quarantined, there is a danger that these places will become part of the
allocation for the entire nursing sector and will not directly benefit
the residential aged care sector.
Health workforce
Dr Rhonda Jolly
Social Policy Section
Prior to the Budget the government made commitments to a number of health
workforce initiatives. These included an announcement that up to 50 000
additional training places for allied health professionals, an area of
the health workforce that has often been overlooked in workforce planning,
would be introduced from January 2009.[40]
Budget press releases confirm the commitment to new allied health workforce
places and introduce a number of other workforce measures. The only other
measure to target allied health workers specifically, however, is minor.
From 2009, allied health students will be able to apply for scholarships
to undertake clinical placements in rural and remote areas. This program
will receive $2.5 million over a three year period from 2009. While this
commitment does respond to concerns expressed by the allied health representative
body about clinical training places, funding for the measure is far from
substantial.[41]
As it is intended that allied health professionals are an integral part
of the government’s new Super Clinics strategy, it is surprising that
allied health measures did not figure more prominently in the 2008–09
Budget. One such measure could well have been an education program to
inform general practitioners about the allied health professions, the
services they can offer and the health cost-effectiveness of many treatments
delivered by allied health professionals.[42]
Another measure might have been an incentives program to encourage allied
health professionals to relocate to rural Super Clinics, given that there
may be some resistance from these professionals (and nurses) to working
in a general practice oriented setting as opposed to a community health
or an autonomous practice environment.
The most significant health workforce budget measure is a commitment
to funding of $99.5 million over four years from 2008–09 for new Commonwealth
supported university nursing places. Under this measure, 90 places will
be available from July 2008 and a further 1170 in 2009. By increasing
places in nursing and medicine, this measure complements recent efforts
by the previous government to respond to predictions that student places
were inadequate to meet future health demands.
Another measure which aims to increase nursing numbers involves the offer
of cash bonuses to encourage some of the 30 000 qualified nurses currently
not employed in the health and aged care sectors to return to their profession.
This measure responds in part to Australian Nursing Federation (ANF) criticism
in 2007 of the previous government’s proposal to introduce hospital nursing
schools. At that time the ANF argued that encouraging already trained
nurses back into the profession was a more effective solution to nursing
shortages than increasing the cohort of less skilled nurses.[43]
Bonuses under this return-to-nursing measure will be available to those
nurses who have not been employed in the health workforce for a period
of more than a year. Six months after their return to the hospital or
residential aged care systems the nurses will receive $3000, with a further
$3000 being paid after they have been employed for 18 months. Hospitals
and aged care providers will receive $1000 for each nurse who re-enters
the workforce to assist with the re-training of these nurses. This measure
will receive $39.4 million over five years.
Other nursing initiatives in the Budget include: an additional $35 million
over four years to provide postgraduate scholarships for mental health
nurses, funding for the creation of a Chief Nursing and Midwifery Officer
position and funding of $12 million to train specialist breast cancer
nurses.
Given the ageing of the population, it is regrettable that the Budget
did not provide more funding for specialist nursing training or support
in areas such as geriatric nursing. As the Australian Nursing Federation
response to the government’s aged care funding announcements in the Budget
points out, aged care nurses and carers are the worst paid in the health
care industry.[44] However,
apart from the cash bonuses incentive, nothing in the aged care package
or in the Budget generally addresses this fundamental problem. Reports
have consistently noted the shortage of nurses in aged care and pay and
conditions are fundamental barriers to their recruitment and retention.
The previous government provided funding to encourage more people to choose
geriatric nursing as a career through a scholarship program which was
allocated funding until 2010–11.[45]
Further support could have been provided by supplementing this recruitment
measure with a retention incentive program. Suggestions for the introduction
of nurse practitioner pilot programs for aged care could also have been
taken up.[46]
Funding for medical workforce initiatives in the Budget is minimal. It
does, however, include $4.6 million over four years to expand the John
Flynn Placement Program (formerly the John Flynn Scholarship Scheme).
This program has been a long-term strategy of government to increase the
number of doctors choosing to practice in rural and remote areas. It subsidises
supervised placements for students in general practice, hospitals or other
medical facilities in rural and remote communities for a minimum two-week
period over a four year period. An additional 150 places will commence
in the program over each of the four years of funding. These will double
the total number of places from 600 in 2008 to 1200 in 2012.
Additional funding of $12 million over four years will be given to the
Medical Specialist Outreach Assistance Program which provides funding
to support specialists who visit rural and remote areas and who provide
support to rural and remote specialists and general practitioners. The
Specialist Obstetrician Locum Scheme will also receive funding of $7.9
million.
Understandably, pre-budget submissions from lobby groups, such as the
Australian Medical Association (AMA) and the Royal Australian College
of General Practitioners (RACGP), urged the government to concentrate
its health workforce efforts on the medical workforce. The AMA called
for funding to deliver training opportunities for doctors in the private
sector and increased support for medical student clinical placements and
the funding of pre-vocational medical student training placements in general
practice.[47] The RACGP also sought funding
for teaching practices and increased incentives to encourage doctors to
take on more trainees. It also called for funding to be provided to improve
the working, economic and social conditions available to overseas trained
doctors, by giving these doctors access to benefits like educational support
and Medicare.[48]
No funding was provided in the Budget for these measures, a number of
which have potential to contribute to the government’s overall objective
of delivering responsible health spending. The pilot program suggested
by the RACGP, which would assist overseas trained doctors to acquire Australian
general practice fellowship qualifications, is an example of where a minimal
budget outlay could potentially have delivered significant positive outcomes.
Overall, in terms of health workforce planning, this Budget perhaps reflects
that the government has had limited time in office to consider more comprehensive
and subtle workforce planning apart from increasing training numbers.
Given that training for any health profession takes time, allocating funding
initially for training purposes is not a bad start. Within the wider health
reform agenda, however, opportunities have already appeared that the government
should seize on in thinking more creatively about the composition and
structure of the future health workforce. One of these coincided with
the announcement of the findings of a rural workforce audit on 30 April
2008. At that time the government committed to examining existing programs
that support rural health professionals. This situation presents the opportunity
to explore workforce options beyond traditional solutions to shortages
and to more efficient delivery of services, such as the introduction of
new health professionals or innovative approaches to the types of work
undertaken by different health workers. [49] These types of options have been discussed
for some time by health academics and practising professionals and they
fit within the framework outlined by the government for long-term reform
focused on delivering better health outcomes and sustainable improvements
to the system.
Alcopop’ tax
Dr Matthew Thomas
Social Policy Section
As a part of its revenue measures, the government has increased the excise
tax on ‘other excisable beverages not exceeding ten per cent alcohol by
volume’—a category that includes Ready to Drink alcohol products, or ‘alcopops’—to
match the tax rate for full-strength spirits. The measure increased the
tax rate from $39.36 to $66.67 per litre of alcohol from 27 April 2008.
This increase in excise has been presented by the government as a health
measure, calculated to tackle the problem of binge drinking among young
Australians, and especially young women. The measure was prompted, in
part, by 2007 National Drug Strategy Household Survey figures, which indicate
that a significant number of young women are drinking at risky levels.[50] ‘Alcopops’ are widely recognised as being young
Australian women’s drink of choice.
The Budget papers indicate that the Minister’s original estimate of the
amount of revenue likely to be raised as a result of the tax, $2 billion,
was understated. The ongoing gain to revenue of the measure from 27 April
2008 and over the forward estimates period is now expected to be $3.1
billion.[51] This revision, when combined
with the fact that ‘alcopop’ drinking levels are forecast to increase
in spite of the tax rise, has led the Opposition and some other commentators
to criticise the increase as a ‘blatant tax grab’.[52] In response to such claims,
the Treasurer, Wayne Swan, has defended the measure as a legitimate means
to tackle the problem of teenage binge drinking, stating that ‘all of
the medical evidence and all of the scientific evidence and all of the
behavioural evidence indicates that [young people] are responsive to price’.[53]
There is indeed such evidence. Treasury advice tabled in Parliament indicates
that the tax change is anticipated to slow the consumption of ‘alcopops’
by 202.7 million bottles over the forward estimates period.[54] According to the World Health
Organisation (WHO), increased alcohol taxation has demonstrated evidence
of effectiveness in reducing alcohol-related problems among young people.
Because young people tend to be on limited budgets, the WHO notes that
alcohol consumption amongst this demographic is more sensitive to price
changes. And, where alcohol taxes have been increased in some developed
countries, this has been found to have reduced among young people the
harmful consequences associated with excessive drinking.[55]
Nevertheless, it should be noted that there is also some evidence that
restrictions placed on the sale and availability of alcohol can increase
the use of harmful alcohol substitutes among young people.[56] It is also the case that young
people could avoid the tax by purchasing bottled spirits and soft drinks
and mixing their own. Indeed, according to some reports, young people
are already doing so.[57] Where this does occur, concerns have been expressed by Drug
and Alcohol Services SA Executive Director, Keith Evans, that young people
could mix drinks that have an alcohol content significantly higher than
that of ‘alcopops’.[58] Alternatively, despite their
preference for pre-mixed spirit drinks, young people could simply binge
drink using alternative, cheaper alcoholic products, such as wine or beer.[59]
Given the multi-faceted nature of alcohol-related problems, broad-based
policy approaches that employ different, but synergistic, strategies,
rather than individual measures in isolation, are required to effectively
tackle binge drinking.[60]
This is where the National Binge Drinking Strategy measures, also introduced
in the Budget, are intended by the government to come into play. The government
has committed:
- $19.1 million over four years to support early intervention and diversion
programs for people under the age of 18 years who engage in binge drinking[61]
- $20 million over two years towards an education and information campaign
via television, the radio and the Internet that will confront people
with the costs and consequences of binge drinking[62]
- a further $14.5 million over four years to develop partnerships with
community and sporting organisations to tackle binge drinking among
young people.
Each of these measures is to be funded using existing resources.
The government has been silent on the question of whether or not it intends
to introduce restrictions on alcohol advertising to complement the National
Binge Drinking Strategy measures.[63]
Based on a review of research and statistics from Member States, the
WHO found that educational approaches to the prevention of alcohol problems
among young people are of limited use, in and of themselves.[64] Moreover, it should also be
noted that the education and information campaign will need to compete
with the alcohol promotion and marketing activities of the alcohol industry,
which frequently target young people. However, where the campaign is combined
with the early intervention and diversion programs, and supported by the
public and relevant stakeholders, it is possible, based on available evidence,
that it may yield some results.[65]
It is worth noting that while the government has indicated that it is
committed to investing a proportion of the revenue gained through the
tax in preventative health initiatives, it provides no indication of how
much this is to be.
On 15 May 2008, the ‘alcopop’ tax was referred to the Senate’s Community
Affairs Committee.[66]
Carol Kempner
Social Policy Section
Introduction
Under the label Education Revolution,
the Rudd Government has introduced a package of education expenditure
measures in the 2008–09 Budget which totals $13.5 billion over four years
(a small amount of this has been expended in 2007–08). The Minister’s
Budget: Education Revolution 2008–09 statement estimates the commitment
at $19.3 billion over the next four years.[67]
The main education innovation in this Budget is in the area of early childhood
education (addressed in a separate section of this Budget Review) where
the government’s aim is to provide universal access. In the school education,
higher education and vocational education sectors the Budget focuses on
meeting the government’s election commitments. The promises of retaining
the current system of funding for non-government schools until 2012, phasing
out domestic undergraduate full-fee paying places and replacing the Australian
Skills Voucher program with a new program, the Priority Places program,
are all met. However, in all three areas major systemic changes to funding
arrangements are awaiting the outcomes of reviews and negotiations with
the states and territories and other stakeholders.
As the alternate figures above would suggest, the funding figures do
not explain fully the Government’s commitment to its ‘education revolution’.
Despite apparent increases in expenditure by the Rudd Government in many
areas, the Budget’s estimates of expenses by function show that total
education expenditure of $18.7 billion for 2008–09 varies little from
the estimated expenditure for the 2007–08 year. Furthermore, there is
little variation between the Rudd Government’s 2008–09 Budget projections
for education expenses for 2010–11 and those projected in the Coalition
Government’s 2007–08 Budget ($20.7 billion and $20.2 billion respectively).
The 2008–09 Budget projections do, however, indicate an increase to $21.8
billion in 2011–12.[68]
The way that expenditures are accounted for in the different budget documents
is part of the reason why budget measures figures are hard to reconcile
with estimates of expenses by function. For example, it is unclear whether
the government’s new early childhood measures (which are addressed in
a separate section of this Budget Review) or the new Education Investment
Fund (EIF) are accounted for in the expenses for the education function
in Budget Paper No. 1. However, it is also likely that the apparently
limited impact of this Budget on total expenses for the education function
is in part accounted for by the Government’s strategy for meeting the
cost of its new commitments with offsets from savings identified under
its Responsible Economic Management measures.[69]
Therefore, measuring the extent of the ‘education revolution’ may well
have to rely more on an assessment of the new policy priorities and programs,
and of their effectiveness, than on the more often-used measure in political
debate, the size of government expenditure.
School education
Marilyn Harrington
Social Policy Section
The 2008–09 Budget is a transition budget for school education, with
elements of the former government’s policies remaining or ‘redirected’
to fund the Rudd Government’s budget measures, which are the result of
election commitments. With legislation for the new schools funding quadrennium
for 2009 to 2012 due this year, the schools funding agreements with the
states and territories yet to be finalised, and the Rudd Government’s
commitment to retain the current system of funding for non-government
schools until 2012, the future direction of Australian Government funding
for schools remains to be seen.
A note on Budget data
The Budget continues the pattern of Commonwealth support for schools.
According to Budget Paper No. 1, of the estimated $9.6 billion
allocated to schools in 2008–09, 67 per cent will be provided to non-government
schools.[70] The table
of expenses by function and sub-function in Budget Paper No. 1
provides an estimated $6.4 billion for non-government schools and $3.1
billion for government schools.[71]
These figures vary slightly from those in Budget Paper No. 3 which
show $3.5 billion for government schools and $6.5 billion for non-government
schools.[72]
It is not clear from the budget papers exactly how much money will be
allocated for government and non-government schools by line item because
the payments for schools for 2008–09 have yet to be determined. Hence,
while the Portfolio Budget Statements (PBS) indicate a total of $7.7 billion
for General Recurrent Grants (GRGs), in Table B.3 in Budget Paper No.
3, only $985 million is apparently allocated for GRGs to government
schools (compared to $1.8 billion in 2007–08) and $2.9 billion for
non-government schools (compared to $5.3 billion in 2007–08).[73] Similarly, for capital grants, the PBS indicates a total of
$473.5 million, while Budget Paper No. 3 indicates an allocation
of $165 million in capital grants to government schools (compared to $528.5
million in 2007–08) and $93 million to non-government schools (compared
to $237.2 million in 2007–08).[74]
Nevertheless, it should be expected that there will be some reduction
in the capital funding line item because of the cessation of the Investing
in Our Schools Programme. There is also a similar discrepancy in the figures
for targeted programs; and the National Partnership Payments are not disaggregated
by school sector.
There is also some confusion about the funding increase
for schools as indicated by the figures in Budget Paper No. 1 which
appear to indicate that funding for schools is only increasing by 0.3
per cent from 2007–08 to 2008–09, compared to a percentage increase of
8.8 per cent for the previous financial year.[75] However, if the figures from
the PBS are applied, the increase is in the order of 9.9 per cent.[76]
It should also be noted that the tabulations for estimated
payments for education to the states for 2008–09 in Table B.3 of Budget
Paper No. 3 are incorrect because figures in the totals column have
been counted twice.
Policy settings
The Rudd Government has committed to retaining the existing system of
GRGs to non-government schools (the SES system) until 2012, but has promised
to conduct a public review of its operation.[77] Meanwhile, in response to funding anomalies
in the SES system, the Budget provides an additional $16 million
over four years from 2007–08 for Orthodox Jewish schools.[78]
The government is also intent on determining the socio-economic status
of government schools for funding purposes. The Council of Australian
Governments has agreed:
… to the development of a national partnership agreement
focused on the particular educational needs of low socio-economic status
school communities. This partnership will form part of the national
education funding agreement to be introduced at the beginning of 2009.[79]
Some stakeholders are disappointed about the funding for schools allocated
in this Budget.[80] In
particular, since 2001 four reports have drawn attention to the problems
of primary school resourcing, for both government and non-government schools.
Two of these reports concluded that many government and non-government
primary schools, particularly those serving disadvantaged communities,
did not have sufficient resources to meet the National Goals
for Schooling.[81]
The Australian Primary Principals Association has called for government
primary school GRGs to be increased to the same percentage of Average
Government School Recurrent Cost index (AGSRC) as government secondary
school GRGs.[82] Currently,
government primary schools are funded at 8.9 per cent of the primary AGSRC
amount, compared to government secondary schools which are funded at 10
per cent of the secondary AGSRC amount. Based on 2007 government primary
school enrolments and the 2007 primary AGSRC amount, such a proposed increase
would amount to an estimated additional $115 million dollars per annum.
Another funding need which has received some attention,
and which has not been responded to in this Budget, is additional funding
for students with disabilities. According to the Independent Schools Council
of Australia, independent schools ‘are not adequately resourced by governments
to meet their legislated obligations’ under the Disability Discrimination
Act 1992.[83] The National Catholic Education Commission has called for more
federal government funding for students with disabilities to ensure that
all such students receive comparable funding ‘irrespective of the school
they attend’. It also advocated that, ‘as an interim measure’, funding
of students with disabilities be equivalent to 65 per cent of the cost
of educating such a student in a government school.[84]
Primary school principals have also reported ‘grossly insufficient’ resourcing
for students with disabilities and that many of these students do not
qualify for disability funding.[85]
In 2006 the previous government committed $5.8 million for a project to
investigate funding arrangements for student with disabilities—Investigating
the Feasibility of Flexible Funding for Students with Disability. However,
no information on the project’s progress has yet been made available.[86]
The budget measures for schools programs reflect a shift in policy focus.
The previous government introduced a range of programs that provided funding
directly to individuals and school communities. These programs attracted
criticism for various reasons because they bypassed state and territory
education authorities, were considered as not addressing the total pedagogical
needs of students or were too narrow in their application and benefit.
The exception was the Investing in Our Schools Programme, which proved
very popular with both government and non-government schools.[87]
Now these programs, either because they have ceased (such as the Investing
in Our Schools Programme) or had their funds ‘redirected’ (for example,
the National Literacy and Numeracy Vouchers Program, Summer Schools for
Teachers and Rewarding Schools for Improving Literacy and Numeracy Outcomes),
have given way in this Budget to broadly based programs that have been
developed in partnership with the states and territories. These new programs
include the Digital Education Revolution, the National Action Plan for
Literacy and Numeracy and Trade Training Centres in Schools.
The future of some existing programs remains unclear, notably the Australian
Technical Colleges.[88] The government is considering
how such colleges will be integrated into the education system once their
current funding agreements expire at the end of 2009.[89] There is also some question about the future of Teaching Australia,
established by the previous government to develop national professional
standards.[90] The Budget contains an announcement
that Teaching Australia will be reviewed and that, while the review is
underway, its funding will be reduced and its activities ‘constrained’.[91]
In contrast to the other school education budget measures, the Education
Tax Refund directly targets individuals. However it is not a true tax
offset, whereby it would reduce the level of a person’s tax payable, as
its name implies. Rather, it is considered a refundable tax offset and
will apply to eligible applicants regardless of their tax liability. That
is, it will also be paid if the person has no tax liability. While the
rebate has been welcomed, there may be some question about its timing
and delivery. The rebate applies to expenses incurred from 1 July
2008 and its first claiming is linked to assessment of a 2008–09 income
tax return. There are problems in providing assistance by way of tax rebates
and this delay may be problematic for some eligible disadvantaged families.[92] For example, it is for this reason that the Child Care Tax Rebate
will in future be paid quarterly rather than annually.
Higher Education
Dr Coral Dow
Social Policy Section
In Opposition, the Australian Labor Party claimed that ‘no policy is
more important than Australia’s investment in human capital—the education,
skills and training of our workforce and our people’.[93]
This emphasis on investing in education as the basis for productivity
growth, overcoming individual disadvantage and social inclusion continues
in government.[94] The
education-related budget measures implement promises to increase investment
in education; however, the focus is on early childhood measures rather
than higher education. This is not surprising considering that the government
has announced a major Review of Australian Higher Education. This review
is to:
... examine and report on the future direction of
the higher education sector, its fitness for purpose in meeting the
needs of the Australian community and economy, and the options for ongoing
reform. It will inform the preparation of the Government’s policy agenda
for the decade ahead.[95]
The review will report by the end of 2008 and we might expect, as a result,
more significant measures in the 2009–2010 Budget. Instead, this Budget
fulfils the government’s election promises in higher education to:
- fund increased university places in early childhood teaching, education,
nursing, dentistry and medicine
- double the number of equity-based Commonwealth Learning Scholarships
and introduce two new scholarship categories
- reduce Higher Education Loan Program (HELP) fees for mathematics
and science graduates and
- replace domestic full-fee paying places with Commonwealth Supported
Places.
The Budget also introduces a new Education Investment Fund (EIF) which
will incorporate the existing Higher Education Endowment Fund (HEEF) and
broaden disbursements to include vocational education and training providers.
Total higher education expenses for 2008–09 are $6 billion, a slight
decrease from the estimated $6.3 billion for 2007–08. This decrease is
due to the one-off ‘Building Better Universities’ measure of $500 million
announced in the Budget that will be allocated and accounted for in the
2007–08 financial year.[96]
Education Investment Fund
The Education Investment Fund (EIF) is the major initiative in the higher
education budget. It will incorporate the $6 billion in the HEEF, a Coalition
Government initiative from the
2007–08 Budget, and will receive a further $5 billion from the estimated
budget surplus of $21.7 billion.[97]
Like the HEEF, the new EIF’s purpose is to fund capital and research
infrastructure. However, unlike the HEEF, the EIF will be able to make
disbursements from the fund’s capital as well as the earnings. The HEEF
expected to make annual disbursements of between $300 million and $400
million from the fund’s earnings. Stakeholders had reservations that such
earnings would be sufficient to meet the shortfall in infrastructure funding
which they estimated at $1.5 billion in 2005.[98] Unlike the HEEF there will be
no cap on annual allocations from the EIF and disbursements will be allowed
from the fund’s capital.[99]
The HEEF was expected to allocate the first round of funding in 2008–09.
However, the government has stated there will be no allocations from the
EIF until 2009–10. The government has instead provided $500 million in
the current financial year, under the budget measure ‘Building Better
Universities’, to improve university infrastructure. Funding will be allocated
to all universities on a formula basis and there is no commitment to further
funding under this measure beyond 2007–08.[100]
Phasing out domestic undergraduate full-fee paying places
Since 1998, universities have been able to offer full-fee paying places
to domestic students. Although the uptake of these places was initially
small, it has increased since the introduction of income contingent FEE-HELP
loans to full-fee students in 2005. Along with this increased uptake there
has been an increase in the proportion of university income from domestic
student fees. The ALP has opposed domestic full-fee places on the grounds
that university access should be determined by merit rather than wealth,
and has promised at every election since 1998 to phase them out.
Estimates of the required commensurate increase in Commonwealth funding
to universities to compensate for the loss of full-fee paying students
have varied widely from $200 million to $700 million. In opposition the
ALP estimated that universities would forgo $325 million in revenue in
the years 2009 to 2011 and promised $355 million to provide an additional
11 000 Commonwealth Supported Places (previously called HECS places) to
replace the full-fee paying places.[101]
This Budget fulfils the promise to phase out full-fee paying places at
public universities where such places will not be offered from 1 January
2009. However, the government, whilst still providing up to 11 000 new
Commonwealth Supported Places, has revised the cost of this measure down
to $249 million. Other than a promise to target areas of national priority
and skills shortage such as teaching, mathematics, science and engineering,
the government has not provided details of the places to be offered and
how they will be allocated. It seems likely that those universities with
a large number of full-fee paying students in law, commerce and medicine
will not be compensated for the loss of these places and will need to
find alternative revenue means, possibly through an increased intake of
overseas fee paying students.
Scholarships
In 2003, the Coalition Government introduced an equity-based Commonwealth
Scholarships Programme to assist students from low socio-economic backgrounds,
especially those from regional and remote areas and Indigenous students,
with costs associated with higher education. The program currently has
two key components: Commonwealth Education Costs Scholarships (CECS)
which assist students with general education costs and Commonwealth Accommodation
Scholarships (CAS) which assist students from regional and remote areas
who have to move to attend higher education and incur accommodation costs.
As an election commitment, under the Scholarships for a Competitive
Future initiative, the government promised to double the number of
Commonwealth Scholarships by 2012 from 44 000 to 88 000. The Budget
provides $238.5 million to meet this commitment. Two new categories of
Commonwealth Scholarship will be introduced from 2009: National Priority
Scholarships and National Accommodation Scholarships. Twenty nine thousand
National Priority Scholarships will target undergraduate students enrolling
in priority disciplines such as nursing, teaching, medicine, dentistry,
allied health, maths, science and engineering. Fifteen thousand National
Accommodation Scholarships will be available for students relocating interstate
to study a specialist course not available near their home.[102]
Conclusion
The Budget makes a modest move to increase the Commonwealth’s proportional
contribution to university revenue and ease the contribution of students.
HECS and HELP fees, together with revenue from international students
and domestic full-fee paying students, has seen the proportion of university
revenue from student fees and charges rise to 38 per cent and Commonwealth
payments as a proportion fall to 41 per cent in 2006.[103] In opposition the government
was critical of the falling rate of public investment in Australian tertiary
education, particularly when compared with other OECD countries.[104]
The phasing-out of full-fee places, the funding of new Commonwealth Supported
Places, the increased scholarships and the reduction in HELP fees for
mathematics and science disciplines may assist in increasing the proportion
of public investment in higher education.
Stakeholders have generally welcomed the Budget, but are disappointed
that calls to increase the level of, and access to, student income support
have not been addressed and that there was no commitment to increase Commonwealth
funding per university place.[105] The $560 million to reduce
HELP fees for mathematics and science students will not increase the funding
per place to universities and goes against recommendations made in the
Australian Academy of Science’s 2006 review of mathematics and statistics.
These recommendations argued that the relative funding of mathematical
sciences departments in universities is inadequate and that the emphasis
should be placed on increasing the Commonwealth grant per place rather
than reducing the student contribution.[106] Stakeholders are looking to next year’s budget
for significant funding increases and initiatives that should follow the
Review into Australian Higher Education.
Vocational Education and Training
Carol Kempner
Social Policy Section
The Rudd Government’s 2008–09 Budget, like the Coalition Government’s
budgets, provides no real growth in state and territory recurrent funding
that would enable them to expand their own vocational education and training
(VET) systems. Nevertheless, consistent with its promise that ‘existing
places will continue to be funded under existing arrangements’, it maintains
the real value of its grants to the states and territories by providing
$1.3 billion under the Skilling Australia’s Workforce Act 2005.[107] The prime focus of Labor’s
election strategy to deal with skills shortages was to provide funding
for new training places through a Commonwealth Government run program—subsequently
labelled the Productivity Places program—not through additional direct
grants to the states and territories for more training places in their
Technical and Further Education (TAFE) institutes.
The Budget does, however, flag some likely changes to Commonwealth/State
arrangements in the future, though details of their scope and whether
additional funding will be involved is not provided. What we are told
is that the Government’s review of Specific Purpose Payments (SPPs) has
determined that the VET SPP will remain as a stand-alone, and that ‘the
outcomes of the review will directly impact on the format of future arrangements
for the sector’.[108]
It may be expected that any changes will be announced when the negotiations
with the states and territories for the new Skilling Australia’s Workforce
Agreement are completed later this year.
Despite the steady-state funding for the states and territories under
the Skilling Australia’s Workforce Act 2005, the Budget
opens up another potential source of funds for the states and territories
and their TAFEs. The new $11 billion Education Investment Fund (EIF),
which replaces the Coalition Government’s $6 billion Higher Education
Endowment Fund (HEEF), is intended to fund capital expenditure and renewal
for vocational institutions as well as higher education institutions.
It is not clear at this stage whether this funding will be limited to
public VET institutions. Under current Commonwealth/State funding arrangements
Commonwealth funds provided for capital purposes to publicly funded VET
totalled $189.3 million in 2005.[109]
Dependent on the arrangements that are put in place to access moneys from
this fund and assuming the EIF adds to the current capital funding for
public VET institutions, this could potentially be a significant development
for the renewal of TAFE infrastructure.
The establishment of the EIF and the development of the Productivity
Places program, continues the Commonwealth Government’s preference for
expanding its own programs over that of increasing its grants to the states,
a direction clearly set by the previous Coalition Government.[110] There is, therefore, some
expenditure growth in administered programs, primarily in the areas of
Australian Apprenticeships and Workforce Skills Development (which includes
the new places created under the Productivity Places program). The Budget
provides funding of $232.6 million for an estimated 110 000 new training
places ($1.9 billion over 5 years for 630 000 training places). The
Budget also provides $3 million for Skills Australia in 2008–09 ($19.6
million over five years); a high-level board of seven experts, which is
to provide independent advice and recommendations to government about
Australia’s skills needs.[111]
It is on the basis of the advice received from Skills Australia that the
Government allocates new training places directly to industry sectors.
Funding for the places will be provided to Industry Skills Councils (ISCs)
which are being strengthened and better resourced with an additional $83.2
million over five years.[112]
However, these expenditures are being partially offset by savings made
from abolishing the Coalition Government’s Australian Skills Vouchers
program which aimed to provide enabling skills through accredited literacy/numeracy
and basic education courses and Certificate II courses. The Coalition
would have provided 60 000 vouchers per year if it had won government.[113]
Therefore, on account of these and some other minor savings, growth in
total VET outlays has, to a certain extent, been contained. Growth in
VET expenditures alone will therefore not serve as a measure of whether
this program is successfully addressing skills shortages. Labor has promoted
the superiority of its new program over that of the program it replaced,
arguing that the training will be demand driven, that is driven by industry
sector needs, and that it will deliver more training places and the higher
level qualifications that the economy requires.[114] Only time is likely to provide an assessment as to whether
the new program meets its targets in terms of training places and skills
delivered. The Government has fast-tracked 20 000 Productivity Places,
but there are initial reports of a low take-up.[115]
It is, however, likely that, as with the Work Skills Vouchers that it
replaced, the take-up rate will increase over time.[116]
Another growing area of expenditure worth noting is in the area of VET
FEE-HELP, the income contingent loan for full-fee Vocational Diplomas,
Advanced Diplomas, Graduate Certificates and Graduate Diplomas. When introduced
in the 2007–08 Budget, projected expenditure for 2008–09 was $3.4 million.
The 2008–09 Budget estimate is for $9.6 million. One of the reasons for
introducing these loans into the VET sector was to establish parity with
students doing the same qualifications in the higher education sector
who had access to such loans. Expectations that providers will compete
to attract students who can access loans for full-fee courses have led
to concerns that limiting loans to full-fee courses might reduce the availability
of publicly funded VET courses. The concern is that the publicly funded
TAFEs, which already offer some full-fee courses, would increasingly substitute
publicly funded courses with full-fee courses.[117] It is unclear how any resulting increase in full-fee paying
courses in publicly funded TAFEs would be reconciled with the government’s
announcement in this Budget of the phasing out of full fee paying domestic
undergraduate places at public universities. It may act as a further catalyst
for the introduction of income contingent loans for publicly funded courses,
an option that Victoria is currently considering and that is also being
considered during the discussions for the new Skilling Australia’s
Workforce Agreement.[118] However, while this idea has been gaining
some prominence it is not uncontested. One critic has said:
Given the sustained concern voiced by political and
business leaders about current workforce participation levels and skills
shortages, it seems clear that Australia needs to establish financing
and other policy settings which will increase participation in post-school
vocational education to near universal levels. This requires measures
which reduce, or at least contain, the real costs to individuals rather
than simply making it (apparently) easier for them to bear a
higher proportion of these costs.[119]
Dr Matthew Thomas
Social Policy Section
The housing affordability crisis
The main vehicle through which the Australian Government, along with
the state and territory governments, provides funding for public housing
is the Commonwealth-State Housing Agreement (CSHA). This joint agreement
has helped to provide public and community housing to individuals and
families in need since the late 1940s. The current CSHA commenced in 2003
and is effective until 30 June 2008.
In recent years it has been Australian Government policy to place a greater
emphasis on Commonwealth Rent Assistance (CRA)—a payment to support eligible
renters in the private rental market—than on the CSHA. As a result, Australian
Government outlays on the CSHA have been declining in nominal and real
terms since 1991–92, while CRA funding has been increasing. For example,
in 1994–95, government expenditure for the CSHA was four per cent higher
than for CRA. Between 1994–95 and 2003–04, an increase of nine per cent
in CRA expenditure combined with a 31 per cent decrease for CSHA resulted
in CRA expenditure surpassing CSHA expenditure.[120] In 2006–07, the Howard Government provided
$2.2 billion in CRA funding, as opposed to $970.6 million in CSHA funding.
In terms of public housing, this shift in funding emphasis has meant
that public housing stock has decreased as state and territory public
housing authorities have been squeezed for funds. Through the CSHA, in
1996–97 the stock of public housing was around 375 000 dwellings,
which was then about five per cent of Australia’s total housing stock.
In subsequent years, however, there was little or no growth in public
housing stock and, as at 30 June 2007, the total number of public rental
dwellings managed by state and territory housing authorities had fallen
to 339 771.[121]
A reduction in the amount of public housing stock has resulted in a reduced
capacity on the part of governments to provide affordable housing to those
most in need. Waiting lists for public housing are increasing. As at 30
June 2007, 176 321 households were on waiting lists for public rental
housing. Of these households, 11 700 were classified as being in
‘greatest need’. This number represented seven per cent of all households
on waiting lists.[122]
Increasingly, the public housing that is available is being used for
emergency housing needs–to assist those estimated 100 000 Australians
who are homeless on any given night and those individuals and households
that are at risk of becoming homeless. In effect, public housing is becoming
welfare housing.
At the same time, rents in the private market are increasing apace. Rents
increased by an average of 12 per cent during 2006–07 and a recent major
report has predicted rent rises of 50 per cent in major cities over the
next four years.[123]
Because there has been an upward shift in the distribution of private
rental stock towards higher-rent properties, higher-income households
have displaced lower-income households from more affordable housing in
the private rental market.[124]
While these lower-income households may be paid Commonwealth Rent Assistance,
this assistance is capped and, once the maximum rate (which is indexed
twice each year to reflect changes in the consumer price index) is reached,
any rent increases are borne by CRA recipients. It should also be noted
that CRA is paid at a universal rate across the country. This renders
it a ‘blunt instrument’, and one that cannot take into account variations
in rental prices across jurisdictions.
In sum, without a significant increase in the number of affordable rental
properties, the situation for renters, and especially for those renters
on low incomes, is expected to worsen dramatically.
Budget measures
In this context, the government has announced a budget housing package
of $2.2 billion over the next four years for measures to address housing
supply pressures. These measures include:
- the National Rental Affordability Scheme, which provides $622.6 million
over four years for the provision of up to 50 000 affordable rental
properties across Australia. The properties are to be made available
to low to middle income earners at 20 per cent below market price. Under
the scheme, the Australian Government will provide to investors an annual
incentive of $6000 per property for up to ten years. This is to be augmented
by a state or territory contribution (which may take the form of cash
grants, concessions on stamp duty or the provision of discounted land)
of $2000 per property over the same period.[125]
- A Place to Call Home, a strategy which will provide $150 million over
five years for the delivery of up to 600 homes across Australia for
families and individuals who are homeless. The funding provided to the
states and territories may be used either to construct or purchase new
homes or to repair existing public housing stock. The Australian Government
contribution is to be matched by the states and territories through
the provision of funding or in-kind support including the provision
of land.[126]
In order to coordinate the implementation of these measures and any other
housing initiatives on a national basis, the government has provided $3.7
million over five years to establish an Office for Housing within the
Department of Families, Housing, Community Services and Indigenous Affairs.[127] The government has also provided
$10.2 million over five years to establish a National Housing Supply Council.
This council is to advise the government and the Council of Australian
Governments (COAG) on long-term housing and land supply trends.[128]
The Budget has introduced changes to the framework in which future Commonwealth
housing funding is to be provided to the states and territories. The number
of specific purpose payments has been reduced and bundled into the new
affordable housing specific purpose payment.[129] This payment is supported
by the new national affordable housing agreement. Under this agreement,
the states and territories will have greater flexibility to target resources
with the objective of improving the supply and effectiveness of affordable
housing.
Comment
It is generally agreed that supply-side responses to the current housing
affordability crisis are essential. The reason being that focusing primarily
on providing Commonwealth Rent Assistance to supplement private rental
merely stimulates demand and increases housing rental costs. It has done
nothing to increase the supply of affordable, public housing.
As noted above, in recent years Australian governments have, on the whole,
been averse to expanding public housing. Such expansion is, in any case,
a slow and expensive process. As a result, there is a need to strengthen
financial incentives to encourage investors to provide affordable private
rental properties. The National Rental Affordability Scheme aims to achieve
this. It has, as a result, been widely acknowledged as a significant first
step in addressing rental housing affordability.
Nevertheless, the scheme does not add to the publicly-owned housing supply
and some commentators argue that without a sustainable public housing
sector, the nation will fail to meet future demand for secure, low-cost
housing.[130] While
the A Place to Call Home strategy will provide for some increase to the
overall public housing stock, this will not be by a significant amount.
Moreover, given that it is not only the size of public housing stock
in Australia that has decreased, but also its quality—primarily because
the amount of rent that can be charged increasingly disadvantaged public
housing tenants, does not meet the direct cost of provision (that is,
the market value)—the states and territories may, to a greater or lesser
extent, be obliged to dedicate A Place to Call Home funds to stock refurbishment
and replacement, rather than to increasing overall public housing stock.
Marilyn Harrington
Social Policy Section
The Minister’s budget statement highlights the importance of the quality
of the early childhood experience for not only the individual’s future
education and other life outcomes, but also the country’s future economic
prosperity.[131] The
importance of these early years, particularly for children from disadvantaged
backgrounds, is well-substantiated as the result of considerable research
that continues to accumulate.[132]
The Rudd Government is also concerned about the fragmented system of child
care and early childhood education.
It is in this context that the government is now implementing a raft
of election commitments designed to improve the overall quality and access
of the early childhood sector. These commitments follow the 2007 resolution
of the Council of Australian Governments to develop ‘an intergovernmental
agreement on a national approach to quality assurance and regulations
for early childhood education and care.’[133]
The government’s concern with the early childhood years has resulted
in the concentration of early childhood programs in the education portfolio
under the newly created Office of Early Childhood Education and Child
Care with its own parliamentary secretary (Maxine McKew). Most of the
early childhood budget measures emanate from the education portfolio,
but there are also allied measures in other portfolios. These include
health portfolio budget measures, such as the health checks for four-year-old
children and the development of guidelines on healthy eating and physical
activity for use by the early childhood sector. There are also other measures
which, while not specifically early childhood, have obvious application
to the sector. The development of a National Child Protection Framework
in the Families, Housing, Community Services and Indigenous Affairs portfolio,
which is discussed in more detail in this brief, is one example.
The Budget’s early childhood measures are only the beginning of the government’s
plans for the sector. As yet, the government has not determined whether
early childhood will be included in the schools agreement or funded through
a separate agreement.[134] It is also not clear from the expenses by function and sub-function
table in Budget Paper No. 1 against which line item early childhood
expenditure is accounted for.[135]
Provision of early childhood education and child care services are set
to be transformed with the establishment of multifunctional Early Learning
and Care Centres. This measure follows from the Prime Minister’s proposal
to combine maternal and child health and welfare, child care services
and preschool at the one location, which was endorsed by the Australia
2020 Summit and the recent joint meeting of the Ministerial Council
on Education, Employment, Training and Youth Affairs (MCEETYA) and the
Ministerial Council for Vocational and Technical Education (MCVTE).[136]
Early childhood education
Marilyn Harrington
Social Policy Section
The 2008–09 Budget represents the first part of a Rudd Government commitment
to provide ‘universal access by 2013 to quality early childhood education
for all children in the year before formal schooling.’[137] Specifically, this commitment
includes access for all Indigenous four-year-olds living in remote communities,
the development and application of national standards and an Early Years
Learning Framework. It is also supported by the provision of additional
early childhood education university places to improve workforce standards.
In 2006–07, 248 172 children attended state and territory government
funded and/or provided preschool services in Australia.[138]
For various reasons, not all Australian four-year-olds attend preschool
or are accounted for in the available preschool attendance data. There
is also considerable variation in the provision of these services, variability
in program structure and inequities in access and participation.[139]
The problems which confront the sector, and which were highlighted by
a 2004 inquiry into preschool education, are considerable.[140]
These problems include access (for example, geographic location and transport),
affordability, the supply of qualified early childhood teachers, state
and territory differences in administration, funding and curricula and
the provision of preschool services for children with special needs, particularly
children with disabilities and Indigenous children. Children of working
parents have also been described as ‘trapped’ in long-day child care.
The latter is not only symptomatic of the problem of program quality in
childcare settings, but also the logistical difficulties for working parents
of combining preschool with child care.[141]
The challenge will be to make early childhood education, which is not
compulsory, an attractive cost-effective option for all children and their
families.
Dale Daniels
Social Policy Section
The Budget includes a number of changes to the Child Care Benefit (CCB)
and the Child Care Tax Rebate (CCTR).
The headline measure is the fulfilment of the election promise to increase
the CCTR from 30 per cent to 50 per cent of out-of-pocket child care expenses
for approved child care. The maximum payment per child will therefore
increase from $4354 to $7500 (indexed) per annum. This is partially offset
by the abolition of the minimum rate of CCB for approved care for higher
income families.
The CCTR was introduced in 2005 to address child care affordability concerns
and head off pressure for full tax deductibility for child care fees.
It has often been criticised for favouring higher income families. However,
the CCTR has escaped the new ‘sudden death’ income tests that have been
introduced for Family Tax Benefit Part B, the Baby Bonus and the Dependent
Spouse Rebate. Its status as a refund of expenses incurred and its role
in encouraging female workforce participation have saved it from being
treated as undesirable middle class welfare.
The Budget also introduces quarterly payments for the CCTR. The timing
of claims for the CCTR has been a long-running problem. Initially, it
could only be claimed in the tax return for the year following the year
in which the child care was used. So the delay between paying for care
and receiving the CCTR could be as long as 18 months to two years. From
the 2006–07 Budget, this was changed so that CCTR could be claimed from
Centrelink at the end of the year in which the child care was used. However,
both of these arrangements resulted in long delays between paying for
child care and receiving CCTR. This delay can be a work disincentive for
primary carers in low income families in particular. Both parties addressed
this issue during the election campaign last year. The Coalition promised
to pay the CCTR fortnightly while the ALP opted for quarterly payments.
These measures will increase the cost of assistance by $1.4 billion over
four years. The CCTR changes are worth $1.6 billion and the CCB savings
total $222.2 million.
There is also an increase in funding for the Jobs, Education and Training
child care fee assistance (JETCCFA). An additional $23.9 million over
four years will provide extra assistance with approved child care for
sole parents studying for up to two years.
Fees for TAFE students studying for Diplomas and Advanced Diplomas in
children’s services courses will have their fees removed from 2009 at
the cost of $60.3 million over four years. This is part of a broader package
to foster an increase in the skilled early childhood workforce. The child
care workforce has for many years suffered from a skilled staff shortage.
This is partly due to a shortage of appropriately trained people, but
also due to the low pay rates on offer. Many child care workers are paid
not much more than the minimum wage.
Child care provision and quality of care
A government election commitment to open 260 new child care centres has
also been addressed with $114.5 million for 38 new child care centres
in areas of child care shortage to be operational by 2010. Six of these
will be early intervention centres for children with autism. The remaining
centres are to be delivered as part of an agreement with the states and
territories.
A further measure involves the development of improved national quality
standards for child care.
National Child Protection Framework
Janet Phillips
Social Policy Section
Child protection and support services aimed at preventing child abuse
and helping children and families affected by child abuse are essentially
a state and territory responsibility. The Commonwealth currently plays
a relatively small direct role in child abuse prevention through the funding
of the National Child Protection Clearinghouse, the collection of data
and a few specific programs. In recent years, there has been a trend towards
a more systematic and national approach with respect to child abuse issues
and, as a consequence, the Commonwealth has moved towards becoming more
involved in the area of child abuse prevention and child abuse monitoring.
On 30 January 2008, the Coalition of Organisations Committed to the Safety
and Wellbeing of Australia’s Children (formed in November 2007) met with
the Minister for Families, Housing, Community Services and Indigenous
Affairs, Jenny Macklin, to discuss the possible development of a National
Child Protection Framework. At this meeting the Coalition was advised
that a consultation process would commence between the government and
relevant stakeholders. Recently, a discussion paper was circulated by
the government to several NGOs and other stakeholders, inviting comments
on a child protection framework.
In the 2008–09 Budget, the government confirmed it will commit to developing
a National Child Protection Framework. The government has allocated funding
of $2.6 million to establish the framework in consultation with all levels
of government, child protection workers and community stakeholders.
It is likely that the new framework will focus on preventing child abuse
through early intervention, better coordination of services and improved
(nationally consistent) protection data reporting across jurisdictions—at
present all the states and territories differ in their data collection
methodology, making it difficult to compare data across jurisdictions.[142]
Peter Yeend
Social Policy Section
The changes to the Baby Bonus announced in the Budget are intended to:
- Limit the Baby Bonus to families with an adjusted taxable income[143] of $75 000 or less in
the 6 months after the birth of a baby. This is the equivalent of an
adjusted taxable income of $150 000 a year or less and
- Pay the Baby Bonus in 13 fortnightly instalments, rather than as a
lump sum.
These changes are to take effect from 1 January 2009.[144]
The budget papers indicate that the Baby Bonus will be increased
from $4258 to $5000 from 1 July 2008. This change was provided for by
the previous government in the amending act that introduced the original
one-off $3000 Baby Bonus payment from 1 July 2004.[145]
That Act provided for the Baby Bonus amount to be $3000 from 1 July 2004,
an increase to $4000 from 1 July 2006 and a further increase to $5000
from 1 July 2008. The Act also provided for twice-yearly indexation of
the Baby Bonus to movements in the Consumer Price Index (CPI). Consequently,
the Baby Bonus is currently $4258.
Income testing of the Baby Bonus is estimated to cost $22.6
million in additional administrative expenses and will lead to savings
of $377.2 million in reduced payments. This will realise net savings
of $354.5 million over the next four years.[146]
In 2006–07, the Baby Bonus was paid in respect of 291 876
children, including 315 adopted children.[147]
While the budget papers do not directly indicate how many families are
expected no longer to be eligible for the Baby Bonus from 1 January 2009,
they give an estimate of the numbers of children and families to be paid
the Baby Bonus in 2008–09. This is 285 000 children from 281 000
families. This figure includes 330 adopted children.[148]
Jenny Macklin, the Minister for Families, Housing, Community Services
and Indigenous Affairs, has indicated that some 16 000 high income
parents will no longer be able to access the Baby Bonus.[149]
Since its introduction from 1 July 2004, the Baby Bonus
has not been subject to any means test. This contrasts with the Maternity
Allowance that it replaced from 1 July 2004, which required the claimant
to otherwise qualify for Family Tax Benefit Part A (FTB-A), which is income
tested. In 2008, a family with one child aged from birth to 17 years
can have an annual adjusted taxable income of up to $97 845 and still
receive some FTB-A. So, compared to FTB-A, the proposed income test of
$150 000 for the Baby Bonus is generous.
The Baby Bonus budget initiative proposes to use adjusted
taxable income as a means test. This makes administrative sense, as adjusted
taxable income is also used as the means test for the Family Tax Benefit
Part A and Part B and the Child Care Benefit. It is also the same test
that is used in other government assistance access matters, such as for
the Commonwealth Seniors Health Card and is the income test applied under
the Child Support Scheme arrangements.
However, there are a number of other legitimate ways by
which taxable income can be reduced, for example, by way of company or
trust arrangements. So the use of adjusted taxable income might not in
some cases provide for a proper test of a person’s or family’s means and
need for support. This, in part, is reflected in the proposed adjustments
to the measurement of income for government support purposes, also announced
in this Budget and discussed in a later section of this brief. These proposed
changes feature in respect of salary sacrifices to superannuation, net
losses from investment and reportable fringe benefits. [150]
Better targeting and delivery of Family Tax Benefit
The proposed change to the Family Tax Benefit Part B (FTB-B) income testing
arrangements announced in the Budget limits access to FTB-B to families
where the primary income earner has annual adjusted taxable income[151] of $150 000 or less.[152]
FTB-B– Origins and current arrangements
FTB-B was introduced, along with the two other main Commonwealth family
income supplement payments (Family Tax Benefit Part A and Child Care Benefit),
with the Goods and Services Tax (GST) and the A New Tax System (ANTS)
arrangements that commenced from July 2000.[153]
FTB-B replaced a number of payments and income tax rebates for sole parents
and single income couple families. The payments and assistance replaced
were Guardian Allowance, Basic Parenting Payment, Family Tax Payment Part
B, Family Tax Assistance Part B, Sole Parent Rebate and Dependent Spouse
Rebate (with Children).
As with the payments and tax measures it replaced, the current FTB-B
tests only one income in a family—the income of the lowest income earner.
Where a claimant is a sole parent, there is an automatic entitlement to
the full rate of the FTB-B, regardless of income. For partnered families,
while there is no eligibility limit on the income of the primary earner,
the amount payable under the FTB-B income test is based on the income
of the lower earner. The rate payable is dependent on the actual income
of the lower earner. On an income of up to $4380 the full rate is paid.
Payments are reduced by 20 cents for each dollar of income above that
amount. In certain circumstances, the lower earner can earn up to $22 302
and still be eligible for some FTB-B. This resembles the old Dependant
Spouse Rebate, which was available to a person with a partner with low
income, regardless of the amount of that person’s own taxable income.
Are millionaire families receiving FTB-B?
Answers to questions on notice in Senate Budget Estimates have demonstrated
that under the current FTB-B income test, some families with substantially
high incomes can access the FTB-B. As the table below shows, access to
FTB-B for partnered families with high incomes, where this income is received
by one of the partners, has been in place since the FTB-B was introduced
on 1 July 2000.
Adjusted Taxable income of customers
entitled to Family Tax Benefit Part B 2004–05
Source: Senate Supplementary Estimates, 2006–07. [154]
The proposed FTB-B income test change
The proposed changes to the FTB-B income test are intended to limit eligibility
to families where the main income earner has income of not more than $150 000.
Therefore, in the case of sole parents, where they have income of more
than $150 000 there will be no access to FTB-B. Where sole parents
have incomes of $150 000 or less they will qualify for the full payment.
In the case of partnered families, where the main income earner has income
of more than $150 000, there will be no access to FTB-B. Where the
main income earner receives $150 000 or less, the rate of the payment
will still be calculated on the basis of the earnings of the lower earner.
Therefore, the limits that have applied to the income of the lower earner
in a two parent family under the income test that was put in place by
the Coalition Government in July 2000, will continue to apply.
How many families will be affected?
The government has indicated that the revised income testing
for FTB-B will affect around 40 000 high income families.[155]
Costs and savings
Extra funding is to be provided to Centrelink to undertake
the additional income testing. This is $0.5 million in 2007–08 and it
is anticipated there will be savings thereafter from Centrelink of $0.1
million in 2008–09, $1.4 million in 2009–10, $1.7 million in 2010–11 and
$2.1 million in 2011–12 as fewer families receive FTB-B.[156] The proposal is anticipated
to realise net savings of $543.8 million over 5 years.[157]
Comment
The proposed $150 000 income limit for the main income
earner for FTB-B access is unusual in comparison to other income tests
in the welfare system. This is because there is a ‘sudden death cut-off’.
Those primary earners with an income up to $150 000 qualify; those
with an income of over $150 000 do not qualify.
While the changes will, to a certain extent, means test
the payment, the mechanism is crude. Unlike the income test for the FTB-A
where the income of both parents in dual parent families is counted, the
test for FTB-B will still not be based on total family income.
Therefore, while the main income earner may only earn up
to the new limit of $150 000 for a family to qualify, the rate at
which the payment is made in a dual parent family will still be calculated
on the earnings of lower earner. The upper limits to these earnings will
continue to apply. This will mean that if the lower earner earns more
than $22 302, the family will not receive any FTB-B, regardless of
whether the main earner, earns $40 000 or $150 000.
The following examples demonstrate the limitations of this
form of means testing. A sole parent will attract the full benefit if
they earn up to $150 000. Dual parent families can attract some benefit
even where their combined income is $172 300, if for example the
main income earner were to earn $150 000 and the lower earner less
than $22 302. However, in the case of a dual parent family where
one earns $80 000 and the other $50 000, the family would not
receive a FTB-B payment, even though the parents’ combined income is less
than $150 000.
It is likely that some allowance for the secondary income
has been maintained so as not to create a disincentive for secondary income
earners to participate in employment. However, the changes do nothing
to address the criticisms that were made of the Coalition Government’s
Family Tax Benefit (FTB) regime, that in the case of two parent families,
it favoured those with children and traditional gender-based divisions
of labour. For example families where the income contribution ratio was
80:20 received a higher benefit that those families where the income contribution
was 50 per cent each. It has therefore been argued that providing the
maximum rate to those families where the ‘primary earner’ contributes
a much larger percentage of the income than the ‘secondary earner’ ‘formalises
the notion of “primary” and “secondary” earner [and] within its structure
underwrites weak labour force attachment by women with children and effectively
entrenches the status of mothers as secondary earners and primary carers’.[158]
Means-testing of government support – expanded definitions of income
Background
The government announced changes in the Budget to the income
definitions it uses to measure access to some assistance programs. These
changes refer to the use of taxable income to arrive at a level of income.
The changes will modify the taxable income of claimants to add back amounts
to their net taxable income. The amounts to be added back are amounts
salary sacrificed into superannuation, net losses from investments and
reportable fringe benefits.[159] This initiative has parallels with the proposed
Budget amendments to the income test for the Commonwealth Seniors Health
Card in which the income test is to be modified to add back in gross amounts
received from a taxed superannuation source and also amounts salary sacrificed
into superannuation.[160]
Use of adjusted taxable income
The government uses adjusted taxable income[161] in several forums to determine access to
assistance and also to determine a level of income for a claimant. The
test is used for the three main family assistance payments—Family Tax
Benefits Part A and Part B and the Child Care Benefit. The test is also
used for the measurement of payer and payee parents’ incomes for the Child
Support Scheme maintenance formula calculations. The income assessments
for the Commonwealth Seniors Health Card, which can be provided to retired
aged persons not on a government income support payment, with annual incomes
below $50 000 (single) or $80 000 (partnered combined), also
uses the adjusted taxable income test (it is proposed that this test will
also be modified).[162]
The reason for adjusting taxable incomes of claimants by
adding back negatively geared property losses, foreign income and employer
provided fringe benefits, is because allowable tax deductions may not
result in an appropriate indicator or real income or means. The changes
proposed in the Budget to expand/modify the adjustments indicate that
there is recognition that the use of this test needs further refinement.
There are advantages both to government and to claimants
in using adjusted taxable income as an income measure. Firstly, the most
recent tax assessment can be used and this removes the need for a separate
income measurement and assessment. This results in a reduced cost to
government. There are also savings for claimants from not having to provide
documents and evidence necessary for a separate income test. The only
readily available alternative to using adjusted taxable income is to use
the income test applied for pension and allowance income support payments
under the Social Security Act 1991 (SSA). This test is tighter
and does not permit as many of the tax deductions allowed under the Income
Tax Assessment Act 1936 and the Income Tax Assessment Act 1997
to reduce income, thereby achieving better targeting. However, the use
of the SSA to measure and test income is administratively more expensive,
as it often requires an extra and separate measurement and assessment
of income.
Certain ‘salary sacrificed ‘contributions to superannuation
This budget proposal involves adding back in the amounts salary sacrificed
into superannuation which are currently taken out of gross salary income
before tax liability is assessed.
Estimated savings
The measure is estimated to save $6.7 million in 2008–09, $156.8 million
in 2009–2010, $135.8 million in 2010–2011 and $145.5 million in 2011–2012.
This is a total of $430.2 million over four years.[163] Close to two thirds of these substantial
savings will be realised in the Families, Housing, Community Services
and Indigenous Affairs portfolio. These savings therefore would mainly
refer to the adjusted taxable income tests that are applied to Family
Tax Benefit Part A and Part B and to the Child Care Benefit, being the
nominally lower income targeted family assistance programs. There would
also be further but less significant savings to this portfolio associated
with its application to the Commonwealth Seniors Health Card.
Net losses from investments
This budget proposal is intended to expand the adjustments made to calculations
of adjusted taxable income to include losses from investments, and where
appropriate, to include negatively geared property losses. In many cases,
negatively geared property losses are already included in the calculation
of adjusted taxable income in the welfare payments area, but not so much
in the taxation area.
Estimated savings
The estimated savings to be achieved over four years for this proposal
is $38 million. There is an administrative cost to government in the taxation
portfolio area of $10.8 million over four years associated with the extra
administrative task of counting these sorts of losses and adding them
back on to taxable income amounts.[164]
Reportable fringe benefits
This proposal is to add back in reportable fringe benefits in the calculation
of taxable income when calculating access to the dependency tax offset,
the seniors’ Australian tax offset and the pensioner tax offset.[165] Currently, the counting of
taxable income to determine access to these tax offsets does not adjust
for reportable fringe benefits. The adjusted taxable income test applied
for welfare payment purposes does already adjust for employer provided
fringe benefits.
Estimated savings
The savings to government revenue are estimated to be $18.5 million over
four years in the taxation area.[166]
Comment
The proposals to make adjustments for the calculations of taxable income
and adjusted taxable income for both welfare and tax purposes raise the
issue of the appropriateness of using taxable income as a base to determine
access to government assistance. As there are many legitimate ways taxable
income can be reduced or offset, it is problematic to use it as a true
reflection of the need for support in some cases. In addition, taxable
income, or even adjusted taxable income, arbitrarily disadvantages those
in employee pay-as-you-go tax arrangements, as their opportunities to
reduce their taxable income is less than others in self-employed, company,
or family trust tax arrangements.
Disability support
Janet Phillips
Social Policy Section
With negotiations currently in progress for a new Commonwealth State
Territory Disability Agreement (CSTDA), there is very little that this
Budget could commit to disability funding other than redirecting and redistributing
existing funds to the CSTDA.
The CSTDA provides the national framework for the delivery, funding and
development of specialist disability services for people with disabilities.
The Commonwealth’s main areas of responsibility in this area include most
disability related payments and allowances and the provision of employment
services for people with disabilities along with some generic services
and support (such as rehabilitation and various health programs). The
states and territories are responsible for most other areas of support
including accommodation, community access services and respite as well
as disability related support in schools. Some areas are shared between
the Commonwealth and the states such as health funding and the Home and
Community Care Program (HACC).
Until a new agreement is negotiated, most of the ongoing issues for the
disability sector, such as unmet need for disability accommodation, must
wait. However, recent government announcements, for example, that there
will be a new National Disability and Mental Health Employment Strategy,
a National Disability Strategy and a Disability Investment Inquiry, have
raised hopes that the new CSTDA will include significant additional funding
to honour government commitments and to address stakeholder concerns of
unmet need.[167]
Disability related initiatives in this Budget
include:
- Confirmation that the government will honour an election commitment
to develop a National Disability Strategy, although there was no additional
funding allocated in the Budget. This commitment will be met within
the existing resources of the Department–$7.7 million over four years
from 1 July 2009.[168]
- A range of measures to support carers, including $100 million for
supported accommodation for people with a disability with older carers.
This will allow some ageing carers to plan for alternative accommodation
arrangements for their children.[169]
See the carer section of this review for details on the carer bonus
and carer payments.
- $25.7 million over four years for disability employment support through
the Business Services Wage Assessment Tool (BSWAT) program. Access to
BSWAT, which was due to expire in June 2008, is provided by the Commonwealth
Rehabilitation Service (CRS), allowing businesses to calculate wages
for supported employees. Further disability employment support measures
will emerge once the National Mental Health and Disability Employment
Strategy is finalised.[170]
- On 3 October 2007, the Coalition Government announced details of
its Helping children with autism package, delivering $190.7 million
in funding over five years. In this Budget, the government has announced
funding for six autism-specific child care centres as part of this package.[171]
Dale Daniels
Social Policy Section
Carer Payment eligibility for those caring for children with disabilities
In March 2007, the Carer Payment (child) Review Taskforce headed by Anthony
Blunn was set up by the Howard Government to examine how effective carer
payment was as a safety net for carers of children with a profound disability
or severe medical condition.[172] The taskforce reported on 8 February to the
Rudd Government and this budget measure is the Government’s response.
The taskforce took the view that:
... the objective of Carer Payment (child) is to enable
carers to provide the care and attention required by children diagnosed
with severe disability or medical conditions. For a carer to qualify
for Carer Payment (child), the care provided must be significantly more
than the care required by a child of comparable age who does not have
severe disability. The need for care must be continuous and the provision
of care must be constant. The caring load must be such that carers are
unable to support themselves through substantial workforce participation.[173]
The taskforce concluded that:
... the payment is not an effective safety net in
capturing all carers of children with severe disability or medical conditions
who require access to income support.[174]
This budget measure provides for a new assessment process based on the
care required by the child rather than the specifics of the child’s condition
or behaviour.[175] This
provides a considerable relaxation of the eligibility criteria that were
previously quite restrictive. The new criteria will see greatly expanded
access to Carer Payment for those caring for children. The extent of this
expansion can be gauged from the expected increase in the numbers eligible.
In June 2007, there were 3570 Carer Payment (child) recipients. The Budget
provides for funding for this payment to continue beyond the original
cut off date of 30 June 2008.[176]
Bonus payments for carers
The Budget contains a one-off lump sum bonus payment to carers who are
already in receipt of the Carer Payment and the Carer Allowance. The bonus
is in recognition of their contribution to caring for people with disabilities.
Carer Payment recipients will receive $1000 and recipients of Carer Allowance
will receive $600 for each eligible person in their care. Those in receipt
of both payments on 13 May 2008 will receive both lump sum payments.
One-off cash payments for carers have become a regular feature of recent
budgets. Starting in 2004–05 they have been provided each year. Recent
controversy over the suggestion that these bonuses were likely to be scrapped
showed the sensitivities around the issue of assistance for carers and
the political capital to be gained by supporting them.[177]
However, this Budget makes no move towards providing legislative arrangements
that would provide for them on an ongoing basis. Carers Australia argues
that assistance for carers in Australia is inadequate. It was stunned
that the government had not acted to make the bonus payments permanent,
with CEO Joan Hughes concluding in her press release—‘This government
likes to talk about supporting working families. Carers do work – they
just aren’t paid for it’.[178]
While not a bonus payment, a precedent for building lump sum payments
into the social security system was established with the Child Disability
Assistance payment. The Howard Government introduced the Child Disability
Assistance payment, a lump sum payment, to provide additional support
for carers of children with a disability. It provides an annual $1000
lump sum for people receiving Carer Allowance for children each July.
The Rudd Government has not yet followed this precedent with the carer
bonus payments announced in this Budget.
On 14 May 2008, Jenny Macklin, the Minister for Families, Housing, Community
Services and Indigenous Affairs, asked the House Standing Committee on
Family, Community, Housing and Youth to inquire into and report on better
support for carers.[179]
This inquiry may produce further reforms for carers in the future.
Dr Matthew Thomas and Peter Yeend
Social Policy Section
Introduction
The Job Network has provided employment placement assistance to unemployed
job seekers in receipt of Australian Government income support payments
for over a decade. When the Job Network was introduced by the Coalition
Government in 1998, unemployment was around double its current rate, and
this was reflected in the system’s original design.
Australia has enjoyed strong economic growth for the past 17 years and
unemployment is at its lowest level in around 30 years. In this context,
job seekers with minimal barriers to employment tend to find work readily,
with little or no assistance from Australia’s main employment service
provider, the Job Network. An increasing proportion of the Job Network’s
clients are now long-term unemployed and people with significant barriers
to employment; that is, those people who have been ‘left behind’. At the
same time, the nation is experiencing widespread skilled workforce shortages.
What is now required is an employment services system that is able to
assist job seekers with significant labour market disadvantage to gain
the skills required by themselves, employers and the nation as a whole.
In recognition of the Job Network’s no longer being appropriate for current
requirements, the government has developed a proposed major reconfiguration
of this system. A broad outline of the proposed changes is presented in
a fact sheet that was included in the 2008–09 budget press releases for
the Education, Employment and Workplace Relations portfolio.[180] Subsequently, the government
has released a discussion paper that solicits views on the future framework
for employment services in Australia and how best to implement it.[181]
Australia-wide consultation sessions on the proposed new model of employment
assistance commenced on 19 May 2008. Following consultation on the proposed
new model and its implementation, the government envisages that the new
system will commence on 1 July 2009.
The proposed new model of employment assistance aims to better cater
to the needs of disadvantaged job seekers and the skills needs of employers.
At the same time, it seeks to address a number of limitations identified
in the Job Network. These limitations include the system’s fragmented
and complex nature, inflexibility where it comes to dealing with the needs
of different job seekers, failure to target resources at the most disadvantaged
job seekers, lack of emphasis on skills development and training, ineffective
and counter-productive compliance regime and excessive administration,
which is hampering the flexibility and scope for innovation required by
Job Network providers.[182]
The main features of the proposed new model are:
- a revised contact arrangement that allocates job seekers to one of
four different assistance streams, based on their assessed level of
disadvantage
- a new Employment Pathway Fund that will, unlike its predecessor Job
Seeker Account, be available to provide assistance to the most disadvantaged
of job seekers
- the opening of employment assistance services to people currently
on the Participation Support Program waiting list, who did not previously
have access to mainstream employment assistance services
- 238 000 training places that focus on the development of skills
in areas of workforce shortage
- a $41 million Innovation Fund to enable employment services providers
to develop projects in partnership with training and community organisations
and the private sector for the most significantly disadvantaged job
seekers and
- the establishment of an external reference group that will assist
in the development of a new performance management system appropriate
to the changed nature of the system.
The following comments identify some perceived merits of the proposed
new model and flag various issues and points of concern.
Funding
The government proposes to spend $3.7 billion over three years from 1
July 2009 on revised employment assistance services.[183] This funding may not, in
fact, amount to an increase in spending by the government on employment
services for unemployed job seekers over the amount that would otherwise
have been spent on the Job Network arrangements. Forward estimates for
the Job Network in the 2007–08 Budget were $1.16 billion in 2006–07 and
$1.21 billion in 2007–08.[184]
It is also not clear precisely to whom employment assistance services
are to be provided: are they to be made available to all unemployed people
or only to those who are in receipt of income support?
Jobseeker streaming and the Job Seeker Classification Instrument
Unemployed jobseekers are to be streamed into four different pathways
based on their assessed level of disadvantage. Stream one is to be reserved
for those jobseekers who are the most ‘job ready’ and thus in a position
to be assisted with job search skills, the preparation of a resume, skills
assessment and training. The other three streams are to be employed for
those jobseekers whose pathway to employment will be protracted as a result
of their need for assistance in overcoming personal and vocational barriers
before moving into employment.
The streaming decisions are to be made using the current, but revised,
Job Seeker Classification Instrument (JSCI) and, where necessary, a Job
Capacity Assessment (JCA). The JSCI is currently used for streaming new
entrants into the Job Network. It is mainly used to identify the most
disadvantaged of new job seekers, who are to be provided with Intensive
Assistance immediately. Other job seekers usually have to spend three
or six months on income support before gaining access to Intensive Assistance.
The JSCI is essentially a computer-driven assessment tool, which compiles
a ‘picture’ of the job seeker based on their responses to questions about
their work and education history and attainments. The JSCI has been criticised
in the past for its being too blunt an instrument for effective screening.
A review of the JSCI’s effectiveness, appropriateness and efficiency is
currently being undertaken.[185]
A review of JCA processes is also underway.[186]
Accurate streaming will be vital if the new model is to prove successful.
If jobseekers are directed to an inappropriate stream, then this could
be wasteful not only in terms of time and potential job opportunities
lost, but also in terms of training and other assistance not provided.
While there is a certain amount of flexibility where it comes to movement
between streams (unlike the rigid continuum of present arrangements),
this movement is still determined by individual need as measured by the
JSCI or, where appropriate, JCA.[187]
Thus, much will depend on the quality of these assessment tools.
Compliance
Under the proposed new model, the jobseeker compliance requirements are
largely the same as the requirements that were instituted under the Welfare
to Work arrangements from 1 July 2006. Non-payment periods will apply
for the number of days of non-compliance; and the sanction of an eight-week
non-payment period applies in the case of a third instance of job seeker
non-compliance. There is a slight watering down of this sanction under
the proposed new arrangements; it is to be applied on a discretionary
basis by employment service providers in instances of wilful non-compliance.
There will also be the option for jobseekers to not have an eight week
non-payment period applied where they are undertaking intensive activities.
Needless to say, all job seekers are likely to take this option.
Employment Pathway Plans
Under the proposed new model, all job seekers are required to work with
their employment services provider on the development of an Employment
Pathway Plan (EPP). This plan is similar to the Preparing for Work Agreement
that is used under current Job Network arrangements. Employment service
providers will need to be sufficiently resourced for the preparation of
these plans in order for them to prove effective in identifying and meeting
the needs of job seekers.
Training places
An additional 238 000 training places are to be made available under
the proposed new model, at a cost of over $880 million over five years.
This is a welcome initiative, as it is generally acknowledged that the
Job Network, as it stands, fails to provide sufficient support for job
seeker training. That the additional training places are to focus on areas
of skills shortage is also a positive innovation, as this both increases
the likelihood that quality, sustainable employment outcomes will be secured
for job seekers and ensures that tax payers’ dollars are well spent. However,
it should be noted that if the training places are to succeed in realising
these objectives they will not only need to address the needs of employers,
but also need to be clearly linked with jobs. Support may also need to
be provided for disadvantaged job seekers who are placed in these positions.
Performance management
The proposed establishment by the Department of Education, Employment
and Workplace Relations (DEEWR) of an external reference group to assist
in the development of a robust performance management system for the new
model of employment assistance is essential, especially given the changed
emphasis of the new model. It is to be hoped that external involvement
in assessment of the new model’s performance will be extended in the future
through making publicly available, in a timely fashion, the maximum amount
of performance data. At present, external assessments of the Job Network
are seriously limited, partly as a result of the commercial-in-confidence
provisions that apply to Job Network provider operations.
Employment Pathway fund
The government’s decision to replace the Job Seeker Account (JSA) with
a more flexible and accessible Employment Pathway fund is a welcome revision.
That the fund will be available for use for the most disadvantaged of
job seekers—including those on the Personal Support Program (PSP) waiting
list who were previously quarantined from mainstream services—is a particularly
constructive change. The revised fund has the potential to encourage employment
service providers to invest in disadvantaged job seekers in a way that
has not been encouraged under existing Job Network arrangements.
Innovation fund
The Innovation Fund is a similarly positive change. This fund should
enable employment service providers the scope to develop in cooperation
with other services, both public and private, original enterprises that
provide support and training for significantly disadvantaged job seekers.
The Brotherhood of St Laurence has recently had some success with such
projects.[188] While
the fund itself is certainly a step in the right direction, it should
be noted that $41 million over three years is not a significant amount
of funding. The same could be said of the proposed employment brokerage
program which seeks to develop job seekers’ skills in the areas of greatest
workforce need—and the $6 million allocated for this plan.
Administration and red tape
Generally speaking, the proposed model’s focus on reducing red tape and
the administrative demands placed on employment service providers, freeing
them up to focus on meeting the needs of job seekers and employers, will
be welcomed. The proposal to combine the contracts for major employment
programs should save a significant amount of time and resources. While
it remains to be seen whether or not red tape will reappear in other areas
under the new model’s arrangements, it should be noted that it is better
that where additional requirements are placed upon employment service
providers this should be in areas that really count, such as the assessment
of job seekers for streaming purposes.
Summary
On the face of it, and in the absence of further detail, the proposed new
model of employment assistance represents a significant improvement over
current arrangements and is necessary to meet the changed needs. The new
model should provide substantially more flexibility and options for employment
service providers. It should also encourage the investment of significantly
more time and resources in disadvantaged job seekers. Much of the success
or otherwise of Australia’s future employment services will depend on
the skills of providers, their knowledge of local employment markets and
whether the proposed new measures are sufficiently well-resourced.
John Gardiner- Garden
Social Policy Section
There is a new rhetoric in the area of Indigenous affairs. Key words
are ‘New Partnership’ and ‘Closing the Gap’. These terms were used in
the communiqué
from the Council of Australian Government’s meeting on 20 December 2007,
where there was a commitment to:
- clarifying the roles and responsibilities of different levels of governments
- closing the life expectancy gap within a generation
- halving the gap in mortality rates for Indigenous children under five
within a decade, and
- halving the gap in reading, writing and numeracy achievements within
a decade.[189]
The words were used again in Prime Minister Rudd’s National Apology
speech on 13 February 2008:
Our challenge for the future is to embrace a new partnership
between Indigenous and non-Indigenous Australians. The core of this
partnership for the future is closing the gap between Indigenous and
non-Indigenous Australians on life expectancy, educational achievement
and employment opportunities.[190]
They were used again in the Closing
the Gaps, Indigenous Health Equality Summit, Statement of Intent
which the Commwealth signed on 20 March 2008, and they have been used
throughout the government’s Indigenous affairs related 2008 Budget statements
and media releases.[191]
The language used is different from that of the previous government and
the present government has broken with the previous government on such
matters as an apology, narrowing of the Northern Territory permit system
and ending all remote Northern Territory Community Development Employment
Projects (CDEP). Despite this, the programs and level of funding supported
in the recent budget are not very different from those of the previous
government. Indeed, for each of the last few years each of the Budget
Portfolio Statements (PBS) has included, unless not relevant, ‘Australian
Government Indigenous Expenditure’ (AGIE). The total of the 2007 Budget
PBS AGIE figures for 2007–08 (that is, before the Northern Territory
Intervention) was $3.2 billion. The total of the 2008 Budget PBS AGIE
figures for 2007–08 (that is, post both the Howard Government’s Northern
Territory Intervention commitments and the Rudd Government’s post-election
but pre-budget commitments) is $3.85 billion. The total of the 2008 Budget
PBS AGIE figures for 2008–09 is $3.86 billion.
It is also the case that this Budget continues the previous government’s
focus on improving the situation in the Northern Territory—a focus some
argue is inappropriate when the needs in Aboriginal Australia are so widespread.
The degree to which the present Budget’s commitments might be judged as
appropriate to ‘a new partnership’ and ‘closing the gap’ may be judged
in the context of the nationwide shortfall in the area of Indigenous housing
having been estimated as $3.5 billion and in health as between $350 and
$500 million per annum.[192]
The government has totalled its ‘new and redirected funding following
the 2007 election’ as $580 million and indigenous relevant 2008–09 Budget
Measures as $425.3 million—giving a total of $1.2 billion with the period
covered by individual commitments varying from one to five years. A full
break down with forward estimates can be found in the ‘Whole
of Government’ section of Budget Paper No.2, and in the 2008–2009
Indigenous
Budget at a Glance.[193]
The commitments included the following: [194]
With respect the Northern Territory (NT)—a total of $666.1 million,
consisting of:
• $168 million
for employment and pre-employment services—including $75.4 million over
two years to enhance
employment services such as those offered to people previously on
Remote Area Exemptions and those offered by Community Employment Brokers
and $5.8 million to enhance
Centrelink Agent services
With respect to Australia as a whole—a total of $554
million, consisting of:
- $160 million over five years for the ‘Land and Sea Country Indigenous
Partnership’—includes $90 million to train and employ 300 additional
Indigenous
rangers, $50 million to support the management of the Indigenous
Protected Areas and $10 million to support indigenous land manager’s
engagement with emissions
trading markets
- $56 million over four years for an expansion
of literacy and numeracy programs
- $122.7 million to improve specific health services—including $90.3
million over five years for child
and maternal health services[198]
- $49.3 million to expand Indigenous drug and alcohol serviced—including
$9.5 for youth
alcohol diversionary activities
- $33.5 million to address drivers of chronic disease and build a stronger
Indigenous health workforce—including $19 million over three years to
a National Indigenous Health Workforce Training Plan to encourage and
support more Indigenous people taking up careers as health professionals
- $10 million over three years for travelling indigenous
mother’s accommodation
- $15.7 million for Bringing them Home counsellors and Link Up service
- $16.6 million over four years for additional early childhood and
parenting services. These will be offered in child care centres and
play group settings and involve assisting families in meeting the health,
education and nurturing needs of young children
- $41.6 million for Cape York Welfare Reform Trial
- $29 million for additional infrastructure in the Anangu Pitjantjatjara
Yankunytjatjara lands and the Kimberley
- $7.6 million for the National Arts and Craft Industry Support Programme,
which directs funding to Indigenous Arts Centres and advocacy organisations
- $5.5 million for additional funding for native title claims
- $6.1 million to continue the Australian
Public Services Indigenous Employment Strategy.
The new government appears to not have had enough time to promise more
than discussions with stakeholders on such matters as how to form a new
national indigenous representative body, how to accommodate the United
Nations’ Declaration on the Rights of the Indigenous People, how to frame
a new Indigenous Economic Development Strategy, how to reform the CDEP
and where to go later this year (after the promised 12 month review) with
the Northern Territory Emergency Intervention.
The Immigration Program
Adrienne Millbank
Social Policy Section
The immigration program is an ongoing program, and it is normally announced
prior to the Budget. For the first time, the announcement of the annual
program numbers has occurred within the context of the release of the
Budget. The clearly stated objective of the 2008–09 permanent immigration
program is to ‘help ease Australia’s skills shortage and help fight inflation’.[199] Reflecting this priority
concern of the Rudd Government, the immigration (non-humanitarian) program
is the largest ever, with the largest skilled component. The planning
level is for 190 300 places—133 500 skilled (independent and
employer-sponsored) and 56 500 family reunion. The humanitarian program
has been set at 13 500 places. The 2007–08 program was set at up
to 158 800 places—108 500 skilled and 50 000 family. The
2007–08 humanitarian program was set at 13 000 places.
For the first time the impact of the migration program on the Budget—direct
costs and benefits—is being reported.[200] Because the program is currently heavily
balanced in favour of skilled migration it has a positive impact: taxes
paid by migrants outweigh the costs of settlement services, welfare, health
care and education. The Minister’s budget press release advises that the
increase of 31 000 skilled, 6500 family and 500 refugee places in
2008–09 will, over four 4 years, cost an additional $1.4 billion and bring
in revenues of $2.9 billion, resulting in a net benefit to the Commonwealth
of $1.9 billion, and extra GST payments to the states and territories
of $1 billion.[201]
These estimates appear to be based on as yet unpublished research conducted
by the consultancy firm Access Economics. Access Economics was commissioned
by the Howard Government to examine the impact of the migration program
on the Federal Budget, following the government’s success after 1996 in
reorienting the program towards skills, and thus its economic and labour
market objectives.[202]
The 1995–96 migration (non-humanitarian) program ‘outcome’ comprised 24 100
skilled stream migrants compared with 56 700 family stream migrants.
The 1995–96 humanitarian program comprised 16 250 refugee, humanitarian
and ‘special assistance category’ migrants.
Issues:
- Rising levels of temporary migrant workers are foreseen. There are
currently around 500 000 temporary entrants with work rights in
Australia (mainly ‘457’ visa holders, students and working holiday-makers).
- House prices are a key driver of inflation. Large increases in migrant
numbers will add to housing demand pressures.
- While there are sufficient skilled applicants in the pipeline for
2008–09, it is not clear whether a permanent skilled migration target
in the order of 133 500 places will be achievable in future years.
There is increasing international competition for skilled migrants.
- A recent study has found only a minority of recently arrived skilled
migrants from non-English speaking countries, especially from the rapidly
growing overseas student component, are finding employment consistent
with their professional qualifications, because of their inadequate
English skills.[203]
- The Minister has indicated that low-skilled and unskilled entry is
being considered for future years.[204] Large-scale intakes of non-English speaking, low-skilled migrants
poses risks for social cohesion, especially should levels of unemployment
rise.
Other immigration measures in the Budget include giving effect to the
ALP’s election commitments to extend the Adult Migrant English Program
(AMEP) and to end the Coalition Government’s Temporary Protection Visa
(TPV) regime.
Harriet Spinks
Social Policy Section
The Adult Migrant English Program (AMEP) provides basic English language
tuition to eligible adult migrants and humanitarian entrants to assist
them to settle in Australia. The 2008–09 Budget commits $49.2 million
for the ‘extension and enhancement’ of the AMEP.[205] This appears intended to address the concern
expressed by the Australian Labor Party in 2007 that many new arrivals
were completing the course without achieving an adequate level of English
and that the program was not meeting clients’ needs.[206]
Funding for the AMEP has increased steadily in recent years, and concerns
that it is under funded, and that tuition entitlements are not meeting
clients’ needs, are not borne out by research into the program’s performance.
An Australian National Audit Office (ANAO) audit report found in 2001
that the primary issue of concern within the AMEP has not been that of
unmet demand by the client target group, it has rather been that of encouraging
eligible clients to take up and complete their tuition entitlement.[207] Client satisfaction surveys
commissioned by the Department of Immigration and Citizenship (DIAC) indicate
a high level of satisfaction amongst AMEP clients. Yet evidence presented
by DIAC to a Supplementary Budget Estimates hearing in October 2006 indicated
that few clients complete the hours of tuition for which they are eligible.
This was not, however, because the program does not meet their needs—reasons
included gaining employment, family commitments, and moving, through Job
Network, to other Commonwealth funded English language programs, such
as the Language Literacy and Numeracy program managed by the Department
of Education, Science and Training.
The new funding comprises $40 million for an Employment Pathways Program
and $9.2 million for Traineeships in English and Work Readiness.
The detail of these programs is not made clear in the Budget announcement.
What does seem clear, however, is that the programs represent a move towards
using the AMEP as a pathway to employment for new arrivals, rather than
simply an on-arrival settlement program aimed at assisting migrants and
humanitarian entrants to settle into Australian society more generally.
Temporary Protection Visas
Adrienne Millbank
Social Policy Section
The government is providing $4.2 million over five years to make legal
and administrative changes and cover extra Centrelink and settlement services
costs involved in abolishing Temporary Protection Visas (TPVs). The Minister’s
press release describes the TPV regime as ‘one of the worst aspects of
the Howard Government’s punitive treatment of refugees’.[208]
Under the TPV regime ‘unauthorised’ entrants, mainly boat people, who
were determined to be refugees under the terms of the 1951 UN Refugee
Convention, were, as a disincentive, only given temporary visas. Neither
permanent residence nor special services are required under the terms
of the 1951 Refugee Convention. These TPV holders were not able to sponsor
family members into Australia, and did not have access to the special
settlement services available for permanent humanitarian migrants, including
free English language tuition and assisted accommodation.
There are currently about 1000 TPV holders in Australia, down from over
9000 in 2002–03. There have been few boat arrivals since 2001, and the
former government was progressively granting permanent visas, after reassessing
protection claims. TPV holders were also able to apply for any other sort
of resident visa. The measure will grant all TPV holders, provided they
meet security and character requirements, permanent protection visas without
the need to have further claims assessed. Australia’s direction on this
issue would appear not to be in tune with policies in other comparable
countries. In the UK, for example, all asylum seekers determined to need
protection are initially accorded only five-year resident visas.
Issue:
- The Opposition’s spokesman has expressed concern that providing refugees
with permanent visas, regardless of their mode of arrival, will send
a clear message to people smugglers that Australia’s borders ‘are open
for business’.[209]
Dr Rhonda Jolly
Social Policy Section
Cyber Safety
Recognition of the power and reach of the
Internet and its largely unregulated nature have increasingly concerned
governments across the world. In particular, attention has focused on
the protection of children from internet predators and material that is
obscene or portrays excessive violence and/or racial vilification. In
late 2007, in an attempt to deal with this situation, the previous government
announced the introduction of an internet filtering scheme which initially
was primarily to rely on free internet software filters to block unwanted
material for individual computers.
During the election campaign, Labor argued
that the Howard Government’s plans would not provide adequate cyber safety
for children.[210] While
it acknowledged the merit of protecting children, it argued that the personal
computer filtering program was ineffective and that existing blacklisting
of sites was inadequate. It promised therefore to improve internet filtering
by introducing filtering by Internet Service Providers (ISPs) who would
be required to filter out prohibited content identified by the Australian
Communications and Media Authority (ACMA).
The government’s Cyber-safety Plan provides $125.8 million over four
years to deliver on this election commitment. Funding for the plan has
been provided from savings of $160 million gained from the government’s
cancellation of the previous government’s internet safety initiative.
The Cyber-safety Plan involves a number of aspects, including instituting
an education program and specific research projects relating to cyber
safety and the establishment of a dedicated website for children. An existing
consultative group will be expanded to provide advice to the government
on cyber safety issues and a new group will be set up to assist the government
to formulate age-appropriate measures to protect children.[211] Following the Budget, the
Minister for Broadband, Communications and the Digital Economy, Senator
Stephen Conroy, announced the new composition of this consultative group.[212]
Indicative of the government’s commitment to cyber safety and in keeping
with its comments during the election that this issue transcends party
politics, the government also intends to set up a Joint Parliamentary
Standing Committee to investigate and report on cyber safety.[213]
The measure will also provide funding for ACMA to develop a comprehensive
‘blacklist’ of inappropriate sites. Funding will be provided under the
measure to the Australian Federal Police and to the Office of the Director
of Public Prosecutions for the investigation and prosecution of incidents
of child sexual exploitation.
A significant amount of the funding under this measure has been allocated
in 2009‑10 to ISPs, who will receive a one-off subsidy towards the
costs of installing ISP level filters.[214]
This budget measure will be welcomed by groups such as Childwise, whose
Chief Executive Officer in January 2008 called on all Australians to support
the government’s mandatory ISP filtering initiative noting that:
It may not be a perfect system but at least it will block
access to thousands of child pornographic sites, reduce the demand and
protect many hundreds of thousands of children from being exploited in
[the] insidious global child sex trade.[215]
The imperfection point needs to be stressed continually to parents, but
to date the various cyber safety schemes mostly highlight their possible
benefits and not their shortcomings. Whatever the system adopted to filter
the Net, whatever the composition or extent of blacklists of unacceptable
sites, it is highly unlikely that they will be exhaustive, given the ever-evolving
and changing nature of the Net.
Labor’s election proposal to address cyber safety also attracted criticism.
Prior to the Budget it was argued that it would be ineffective in blocking
content and that it would be likely to increase costs and to slow broadband
speeds.[216] This comment
has resurfaced with the announcement of this budget measure. The Electronic
Frontiers Australia (EFA) lobby group arguing from this perspective, has
commented that in a time when the government is cutting some services
to fight inflation, it is bewildering that millions of dollars have been
committed to this program before feasibility trials have reached a conclusion
on the effectiveness of the proposed plan.[217]
While there is clear support for policy that attempts to keep the Internet
safe for children, the questions raised by critics of this particular
policy should not be overlooked by the government in refining the measure.
One of the most important of these is emphasised by one commentator who
notes that a disturbing implication of ISP filtering is that ‘it creates
the potential for governments and security agencies to add to website
blacklists without public discussion or comment’.[218] This measure has been on the government’s
agenda for some time, yet there has been no attempt to provide details
of how a blacklist will be compiled, its extent or whether the list can
be challenged. Making this information public as a priority, as the government
has in other instances, may possibly have allayed some concerns about
the measure.
Perceptions are that censorship of this type can only occur in repressive
regimes, but it nevertheless remains that this measure should be subject
to scrutiny in its development to ensure that the right balance of freedom
of access and protective restriction is achieved.
Transition to digital radio and television
Like most developed nations Australia has begun the process of converting
television and radio broadcasting from analogue service to digital. Both
digital television and radio will deliver substantial benefits for consumers,
which include better quality sound and pictures, interactive features
and greater listening and viewing choices. The conversion will also free
up valuable spectrum resources.
Progress towards digital conversion has been made since the early 1990s.
Digital television services have been transmitting since 2001 and digital
radio trials have been conducted since 2003. In 2006 the previous government
introduced a formal plan for a final switchover from analogue services
to digital for television.
The government rejected much of this plan and resolved to abolish Digital
Australia, the organisation set up to assist in the digital transition
process. In March 2008 it announced its own million digital transition
strategy to complete the switchover to digital-only broadcasting by December
2013.
This budget measure provides $37.9 million
funding for the switchover strategy. A government Digital Television Switchover
Taskforce funded under the measure will coordinate and oversee the transition
from analogue to digital television. The Taskforce is to work with stakeholders,
including the Australian Communications and Media Authority (ACMA) which
is to undertake technical projects and assessment of transmission and
reception throughout Australia. It will also cooperate with an Industry
Advisory Group set up to develop a detailed switchover timetable and reliable
information for consumers about the purchase of digital equipment. A ‘Digital
Tracker’ will be implemented in 2008–09 to assess public perceptions of
the digital transition, including public awareness and intention by households
to convert and actual conversion rates.
Some critics have harshly labelled parts of this measure as shifting
deck chairs on the Titanic. The new Digital Television Switchover Taskforce,
for example, is seen as simply a name change for the previous government’s
Digital Australia.[219]
Similarly, critics have concluded that the funding allocated to this measure
will not be sufficient to ensure a smooth transition to digital. One makes
the point that:
[United Kingdom] taxpayers are in the process of spending
$2 billion to assist the conversion of television from analogue to digital
… in the end the Government will just have to fork out to buy some people
a free TV because they can’t afford it, and their sets will go black just
as the fireworks are starting on New Year’s Eve 2013, which would be a
serious bummer. And as the date looms there will have to be a lot more
money spent on advertising the switch-over than is currently being budgeted.
Industry sources suggest the total cost will be more like $200 million
than $37.9 million.[220]
In contrast to the digital television funding measure, the government
expects that funding savings will be achieved under its digital radio
measure. These will be achieved by amending the Broadcasting Services
Act 1992 (the BSA) to extend the legislated timetable which requires
commercial broadcasters to commence digital radio broadcasting on 1 January
2009. An extension will be sought for a six-month period. This amendment
is not intended to prevent commercial, community or national broadcasters
from commencing digital radio earlier, subject to necessary regulatory
approvals being in place.
Some commentators have suggested, however, that this seemingly uncomplicated
move to extend the introduction of digital radio may prompt broadcasters
to lobby for more changes to the BSA than is anticipated in this measure.
Community radio may, for example, seek changes which will allow it to
own digital radio infrastructure.
Despite such comments and concerns that the funding allocated for digital
conversion will need to be supplemented in a number of budgets to come,
these measures largely represent a positive step towards full digital
implementation.
John Gardiner- Garden
Social Policy Section
The 2008 Budget included large commitments in three different areas of
the arts.
The first area of major commitment is film. In February and March 2008
the Government followed up on its election commitment to give the National
Film and Sound Archive its own statutory base, by introducing and passing
the National Film and Sound Archive Bill 2008.[221] At the same time it followed up on the previous
government’s commitment to amalgamate the Australian Film Commission,
the Film Finance Corporation and the Film Australia Commission and introduce
a new film financing arrangement, by introducing and passing the Screen
Australia Bill 2008.[222]
In this Budget it was announced that the National Film and Sound Archive
will receive $105.2 million over four years, including $25.2 million in
2008–09. Screen Australia is to start operating from July 1 and will receive
almost $103 million in 2008–09. The total funding is less than the total
amount provided for the bodies that are being amalgamated in the 2007–08
Budget. However, the legislation has introduced a new 40 per cent producer
rebate for qualifying productions which might make the industry a little
less reliant on direct funding. Peter Garrett, the Minister for Environment,
Heritage and the Arts, declared that the commitments ‘will provide the
screen industry with certainty and confidence’ and are ‘a critical step
in ensuring a sustainable and successful local industry’.[223]
The second area is that of resale royalty rights for Australia’s visual
artists. The introduction of a scheme to realise such rights has been
called for by many reports, been sketched out in two Private Members Bills
introduced by Federal Labor MPs (Kate Lundy in 2003 and Bob McMullan in
2005) and has been part of recent ALP policy .[224] The Access Economics report, Evaluating
the Impact of an Australian Resale Royalty on Eligible Visual Artists,
October 2004, did not, however, express full confidence that a scheme
would actually deliver the increase in the visual artists’ net income.[225] Minister Garrett announced
that the scheme will bring Australia into line with similar resale royalty
arrangements operating in the United Kingdom and Europe’, but the Access
Economics report had found some of these arrangements are unnecessarily
complex and not always benefiting those intended.[226] The Minister promised, however,
that ‘the scheme would reflect the particular characteristics of the Australian
art market and maximise the benefits to artists’. He anticipated that
an open tender process would be conducted in the second half of 2008 to
select an organisation to set up the collecting agency.[227]
The third major area of new commitments was that of increasing youth
participation in the arts. To this end, over the next four years, the
Australia Council will receive $6.6 million to increase opportunities
for young and emerging artists, and $5.2 million to fund professional
artists’ residencies in schools and universities. The Minister has said
that these measures would ‘expand the opportunities for young people to
experience the arts and create new opportunities for the next generation
of … artists’.[228]
The money follows, however, a period in which the Australia Council was
obliged to make $2.0 million in operational savings to satisfy a 2 per
cent efficiency dividend. The Budget, moreover, did not support the more
robust strengthening of arts education in schools which had been called
for in the November 2005 report of the National
Review of School Music Education[229], in the August 2006 workshop convened following that
report, in the ALP’s 2004 and 2007 election policy documents,
and in the Towards a Creative Australia sessions at the recent the 2020
Summit.
The above sum of just over $1 million a year for the artist in residencies
program does not compare favourably with the £332 million committed in
November last year by the U.K. government to support a national commitment
to better music education in schools. The latter included money for free
music tuition for every primary school child for at least a year, children’s
choirs, orchestras and other ensembles, banks of new musical instruments,
a programme to put singing back into the classroom, projects to involve
children in deprived areas in music (based on highly successful Venezuelan
project, El Sistema) and for extending the partnership work that has made
the Music Manifesto initiative a success.[230]
Beyond the above three major areas of announcement, the
2008 Budget also provided for the following:
- $7.6 million (already announced in February) over four years to support
the already existing National Arts and Crafts Industry Support Program
through which funding is directed to Indigenous art centres and advocacy
organisations
- $11.8 million over four years for the Regional Arts Fund Program to
support sustainable cultural development in regional and remote Australia.
This represented a slight fall on previous year’s commitments, but the
Budget also committed $10 million over four years for a not unrelated
program to be called Creative
Communities[231]
promised during the 2007 Election as a response to the Australia Council's
Community
Partnerships Scoping Study Report 2006[232].
- $2.4 million over four years to support contemporary Australian music
though the Australian
Music Radio Airplay Project (AMRAP)—a program which commenced operation
in 2000 with $1.5 million in federal funding provided to the Community
Broadcasting Foundation.[233]
The 2008 Budget offered no support for improved access for artists to
social security (the so-called ‘ArtStart’ program) which Peter Garrett
as Shadow Minister for the Arts flagged in a paper entitled New
Directions for the Arts in September 2007 and which was part of the
Australian Labor Party’s 2007 election policy.[234] The promise was to harmonise Australia Council,
Centrelink and the Australian Tax Office rules and determine the most
equitable way to treat earnings and royalty payments for artists currently
receiving welfare.
It is also noteworthy that collecting agencies such as the National Library
and National Museum received effective funding cuts. The National Library’s
budgeted income for 2008–09 ($71.3 million) is only $1.3 million more
than estimated actual income for 2007–08 because detracting from a projected
(mostly interest) revenue increase of $2 million, is a $0.6 million efficiency
dividend. Similarly, the National Museum of Australia’s budgeted income
for 2008–09 of $45.6 million is $1.6 million less than the estimated actual
of $47.2 million for 2007–08. This is not only because of some one-off
funding received during 2007–08, but also because the efficiency dividend,
in the absence of any funding increase, will reduce revenue from the government
by $0.5m.
Dr Rhonda Jolly
Social Policy Section
Prior to the Budget, the government withdrew $25 million funding support
to the Australian Rugby Union for redevelopment of Ballymore Oval and
$10 million in funding support for Rugby League’s centenary celebrations.[235]
The Budget also rescinded a number of other proposed sporting measures
including the Fishing Hall of Fame and the establishment of a National
Training Centre for Aerial Skiing. It has reduced funding for an advertising
and information campaign on illicit drugs in sport considering that this
has been addressed through existing drug campaigns.
There is, however, a considerable amount of funding for sporting programs
and infrastructure in this Budget.
A balance appears to have been struck between funding for elite sports,
sporting events and promoting ‘grass roots’ participation. Funding has
been provided, for example, for the upgrade of a number of sporting venues
such as the Campbelltown Sports Stadium ($8 million over two years) and
the Penrith Valley Sports Hub ($5 million in 2008–09). While these venues
are used for elite sporting competition, as the government notes, improvements
to these grounds will also facilitate greater use by community and other
sporting groups.
The government has also provided $20.8 million to a diverse range of
smaller community sports projects. It notes that providing this budget
funding delivers on a number of election commitments and the development
of accessible community facilities is part of its strategy to increase
participation in sport.
A local sporting champions’ measure will receive $6.4 million over four
years. This measure will provide grants to junior athletes to participate
in sporting events that require them to travel more than 250 kilometres
to compete. The program is intended particularly to assist young people
from rural and remote areas participate.
Funding of $16 million over two years will be provided to the Football
Federation of Australia for a number of purposes such as support to establish
a football facilities fund to deliver grants to local football clubs and
to provide support for coaching and other referee programs. It is interesting
to contrast this with Netball Australia which will only receive $2.4 million
over three years. This funding is intended to assist in the establishment
of a new national netball league, an Indigenous netball strategy and a
junior participation program. Both netball and football (soccer) are amongst
Australia’s most popular sports, so it could be argued that such budget
incongruities perhaps reflect the lobbying abilities of the sports promoters
and not the actual needs of the particular sports.[236]
Two specific measures have been funded to assist participation in sports
by people with a disability. The Australian Paralympic Committee will
receive $22.8 million over five years and Special Olympics Australia has
been given $1.2 million over four years. Funding of $2.3 million over
four years has been provided to assist RecLink to expand sport and cultural
programs for homeless people and people suffering from drug and alcohol
abuse and mental illness.
The government has provided extra funding ($7.6 million over five years)
to the Australian Sports Commission (AIS) so that, unlike other agencies
which will be affected by a two per cent efficiency dividend imposed in
the Budget, the AIS will continue a similar level of grants funding to
various sporting organisations.[237]
The government will contribute to the staging of international events
with contributions of $8.5 million towards the World Masters Games in
Sydney in 2009 and $8.6 million to assist Western Australia to stage the
2011 World Sailing Championships.
Another interesting incongruity is that while funding for some elite
sports has been rejected, other sports have been well served by the Budget.
Funding was cut for a Rugby League Hall of Fame in the League’s centenary
year, yet $6.5 million was provided to expand cricket’s Bradman Museum.
Funding for the development of Ballymore Oval was also cut, but $17.5
million was provided for the redevelopment of the Cricket Australia Centre
of Excellence in Brisbane.
An amount of funding ($4.4 million) will be provided to the Australian
Sports Anti-Doping Authority in 2008–09 for education programs and its
drug testing regime. This will facilitate compliance with the World Anti
Doping Code. The government has announced that funding for these purposes
will be reassessed following a review of cost recovery by the anti-doping
authority.
There has been little comment on the Budget sports measures, probably
because significant cuts had been previously announced. Another reason
that sport funding in the Budget most probably does not elicit much comment
is that in general, Australians support funding for both grass roots and
elite sports. Yet another reason may be that as funding arrangements for
most sports are assessed and administered by the AIS, funding of individual
sports is to some extent divorced from the Budget process if funding for
that sport’s national body is seen to be adequate. One commentator does,
however, argue that funding for sport could be provided by corporate sponsors
rather than government and that the savings should then be transferred
to other areas.[238] Such a view devalues the
contribution sport and physical activity make to the overall health and
well being of society; a reality which all governments in Australia continue
to acknowledge.[239]
[29].
Productivity Commission, Cost recovery by Government agencies,
Report no.15, AusInfo, Canberra, 2001, p. 175.
[30]. Commonwealth of Australia, Australian
Government Cost Recovery Guidelines, Canberra, 2005, p. 5, http://www.finance.gov.au/finframework/docs/Cost_Recovery_Guidelines.pdf,
accessed on 14 May 2008.
[86]. For more information
see the Investigating the Feasibility of Flexible Funding for Students
with Disability website, http://www.dest.gov.au/sectors/school_education/programmes_funding/programme_categories/
special_needs_disadvantage/flexible_funding_students_with_disability.htm,
accessed on 15 May 2008.
[145]. Family Assistance
Legislation Amendment (More Help for Families–Increased Payments) Act
2004, http://www.fedlaw.gov.au/ComLaw/Legislation/ActCompilation1.nsf/
0/D55B6ED42CDBFD5ECA25720A00253C1D/$file/
FamilyAssLegAmendMoreHelpFamOneoffPay2004.pdf , accessed on 21 May
2008.
[223] P. Garrett (Minister
for the Environment, Heritage and the Arts),
Securing the future for Australian screen industry, media release,
13 May 2008,
http://www.environment.gov.au/minister/garrett/2008/pubs/budmr20080513g.pdf,
accessed on 15 May 2008.
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