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Here’s your 5-minute Aussie budget explainer (and what people are saying about it)

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.

australia budget
Photo: AAP

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.

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.

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.

Mental health

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.

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”. 

Environment

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.

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.

NBN

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.

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.