From tax cuts to uni funding to mental health subsidies, here’s how Australia’s newly announced 2020 budget will affect you.
Last night Treasurer Josh Frydenberg unveiled Australia’s 2020 budget, which was delayed five months due to the coronavirus pandemic.
The long and short of it is that between the recession, climate change, and the ongoing effects of coronavirus pandemic (including widespread business closures and loss of jobs), things aren’t looking too good. The new budget is expected to blow national debt out to $966 billion by June 2024 and it’s being dubbed the most crucial federal budget in recent history. Here are the highlights.
JobMaker: wage subsidy for young workers
Young people are currently the most unemployed demographic in the country. So, in an attempt to encourage businesses to hire young unemployed workers, they’ll be giving them incentives.
This applies to anyone who is under 35 and on welfare. For employees aged 16 to 29, businesses will get $200 per week for up to a year. Whilst for employees aged 30 to 35, they get $100. Employees must work more than 20 hours per week and major banks are excluded. This comes as JobKeeper is set to progressively get scaled back.
Whilst this is good news for the unemployed, some are pointing out that this incentive may encourage employees to sack already existing staff and hire new workers who will bring in the accompanying wage subsidy.
“JobMaker” will be “JobReplacer” if employers can just get rid of their existing casual workforce or cut the hours of part-time workers and replace them with unemployed ppl. who come with a wage subsidy
— Sally McManus (@sallymcmanus) October 7, 2020
Does the budget create an incentive for an employer to sack an existing worker and replace them with a young unemployed person to claim a$200 wage subsidy?
— Sue Dunlevy (@Sue_Dunlevy) October 6, 2020
Tax cuts for all
The government is bringing forward Stage 2 income tax cuts which were originally meant to happen in mid-2022. This means that Aussie workers will get varying tax cuts, with most people receiving around $1,000 back over the next year.
Sadly, the higher earners will benefit more from this, but of course, everyone will still get a chunk of the pie. Lowest earners will see a tax relief of about $500, whilst the highest earners will save about $2,500. So long as the changes are passed, the tax cuts could start showing up in your payslips within the coming months.
Yet as Australia’s economy dangles perilously in recession, many are pointing out that these tax cuts – which ultimately benefit the rich and take money from public infrastructures like schools and hospitals – are seemingly backwards.
It’s kind of nuts that tax cuts are almost universally covered in the media as a “cash bonus” for people, as opposed to the steady erosure of the revenue base that funds hospitals, schools etc
— Osman Faruqi (@oz_f) October 6, 2020
The ‘tax cuts’ for low & middle income earners disappear after a year, but the wealthy keep theirs forever.
This budget is a trickle-down con-job & Labor should join us in rejecting the unfair tax cuts.
Tax cuts today = cuts to services tomorrow.
— Adam Bandt (@AdamBandt) October 6, 2020
I have work. And an income around the Australian median income level. I don’t want any bloody tax cuts. I want unis and artists and scientists and the ABC and young unemployed people to be supported by the bloody govt.
— Dr Sian Prior (@sianprior) October 6, 2020
Facing biggest recession in living memory and we’re fighting it with tax cuts and business write offs
— Bridie Jabour (@bkjabour) October 6, 2020
Since we’re headed for a $1,000,000,000,000 debt I’d like to know why nobody asks how we can afford tax cuts for the rich? #Budget2020
— Joshua Badge (@joshuabadge) October 6, 2020
Funding for universities and short courses
The government will be funding 50,000 new higher education short courses in areas like agriculture, health, IT, science and teaching, whilst $1 billion will also be going to universities to fund research. There will also be 12,000 new Commonwealth-supported places for higher education on offer next year.
Whilst this may seem like a win for higher education, university courses in areas like law and humanities are facing up to a 113% increase in fees under the Coalition government’s new university funding changes, which are set to come into place at the beginning of next year.
Despite @JoshFrydenberg’s spin, this govt is presiding over a massive cut to university budgets that is gutting the sector. Nothing about job creation or retention for unis in #Budget2020 @NTEUNational #FundUniFairly
— Damien Cahill (@DamienCahill8) October 6, 2020
— stevecolbran (@EtNa_Os2heavy) October 6, 2020
In a big win for mental health treatment, the number of subsidised psychological services is set to double. Currently, Australians are eligible for 10 Medicare-funded psych sessions per year, and now they’ll be eligible for 20. It looks like Lifeline, headspace, Beyond Blue, and Kids Helpline are all set to receive more funding too.
Hospitals will also receive an extra $33.6 billion in funding over the next 5 years.
— Jeremy Bishop (@leanleft) October 6, 2020
It seems women have been left out of #Budget2020 even though they have been on the front lines fighting the pandemic & they have lost the most jobs.
— Sally McManus (@sallymcmanus) October 6, 2020
On a side note, one massive point of contention is that, following the 2018 budget, a yearly amount of more than $61 million is given to a national chaplaincy program in primary and secondary schools, which basically funds chaplains to support the “emotional wellbeing of students”.
So in the #budget2020, $61.4 million will be committed to chaplaincy funding in schools, while payments to indigenous health total to $16.7 million. Hmmmmm….
— Gerard Cockburn (@gerard_cockburn) October 6, 2020
— 🎀 Simon Rosenberg (@simon_rosenberg) October 6, 2020
— 💧Jim Pembroke (@Jim_Pembroke) October 6, 2020
A new energy plan will see the government offering up $1.9 billion to support low emissions and renewable technologies in an attempt to address climate change. Unfortunately, they’ll also be unlocking five key gas basins around the country in an effort to create more jobs…and more carbon emissions.
As you can imagine, this has received a lot of criticism.
So, here it is. The only mention of climate in Aus’ new budget speech by the Treasurer is immediately followed by the government’s plans to expand the extraction and burning of fossil fuels (and not just any fossil fuel: the key driver of global emissions growth) #Budget2021 pic.twitter.com/6MNNlqf0jF
— Ketan Joshi (@KetanJ0) October 6, 2020
The one mention of climate in the budget is followed by “we are also helping to unlock 5 key gas basins” https://t.co/HeXXI33jsM
— Tom Lang (@Langaround) October 6, 2020
Over 1billion in ‘environment’ yet no mention of renewable energy. Seriously??
This was an opportunity to do some serious investment in smart technology that would lower the cost of electricity and help the environment.
Appalling omission #BUDGET2020
— Dee Madigan (@deemadigan) October 6, 2020
On a high note, Australia’s national science agency CSIRO will receive $459 million in funding.
First home buyers
The First Home Buyer loan program is doubling its intake so that another 10,000 applicants will be elected each year. Successful applicants are able to purchase a home with a mere 5% deposit and avoid paying mortgage insurance.
Unfortunately, on the flip side, the budget includes no support for social housing.
Absolutely nothing for social housing in #budget2020
— Kon Karapanagiotidis (@Kon__K) October 6, 2020
Australia’s NBN, the butt of all jokes (thanks Malcolm Turnbull), is receiving a $3.5 billion upgrade in the hopes that it might finally compare to that of the rest of the world.
Frydanegg announces another $100B in #budget2020 to
— david j hodder (@deejayhodder) October 6, 2020
— Angus Hoy (@GusHoy) October 6, 2020
All in all, whilst there are definitely some positives to this budget (most notably, the increase of subsidised mental health sessions), it appears, overall, to be heavily tilted in favour of one particular sector of society, and not exactly the shining beacon for which we were hoping in a post-pandemic Australia.
I’ll leave you with some final thoughts.
This is a deeply ideological budget. It rewards the Morrison government’s friends, and punishes perceived enemies. #Budget2020
— Ben Eltham (@beneltham) October 6, 2020
Winners: Rich people, the gas lobby, & chaplains
Losers: Women, workers, unemployed people, pensioners, universities, public servants, clean energy, refugees & asylum seekers, international students & other temporary migrants #Budget2020
— sara m. saleh | سارة صالح (@SaraSalehOz) October 6, 2020
— Kane (@Kaneosaurus) October 6, 2020