Working people鈥檚 budgets are under severe and increasing strain.
Rampant inflation, including galloping energy bills, stagnating wages and social security payments, higher interest rates on mortgages and unaffordable rents are making life more difficult, particularly for those on low incomes.
Yet, despite to ease cost of living pressure before the May election, Treasurer Jim Chalmers鈥 October 25 budget largely failed to deliver.
Labor鈥檚 first budget since 2013 reduces the expected federal deficit from $78 billion, predicted in the Coalition鈥檚 final budget in March, to $36.9 billion, by providing a gift to financial markets.
by saving the majority of windfall tax receipts received from mining (owing to high coal and iron ore export prices) along with cuts to some of the more gratuitous spending programs introduced by the former Coalition government.
Additional funding of $531.6 million has been to 26 weeks, in increments between 2023鈥27, albeit that the leave will be paid at the minimum wage and without superannuation.
An will be allocated to raise childcare subsidies from 2023, while leaving the majority of childcare in private hands. This effectively offers a government-funded guarantee to the profitability of private childcare operators.
The budget also commits an extra $350 million to over five years from 2024 (with the states committing to 10,000 more), in addition to 30,000 more social housing dwellings.
This commitment will barely make a dent in unmet demand. For instance, demand for social and affordable housing in the eight local government areas in Western Sydney alone is estimated to reach .
The budget offers little financial relief to working people being buffeted by high costs and low wages, and even less to those dependent on welfare.
It predicts that 56% over the next two years. Real wages are a further 2% over the next year,听while the call for a much-needed has been denied.
The full extent of the financial pressure on working people only became clear the day after the budget with the release of quarterly inflation figures.
Prices rose by 1.8% over the three months to the end of September, taking annual price growth to 7.3%, according to the .
The biggest contributors to price rises included the price of fuel, housing costs and food 鈥 spending few of us can avoid.
At the same time, real wages (nominal wage rates, adjusted for inflation) continue to fall dramatically.
鈥淚n the past year real wages fell so far they are now back to 2012 levels,鈥澨齛ccording to .
The 听(ACTU) said workers are likely to have suffered a pay cut of at least 4% pay in real terms for the year, the deepest on record.
鈥淲orking people have been waiting a decade for a pay rise and have spent more than a year watching their wages go backwards,鈥 ACTU Secretary Sally McManus said on October 26. 鈥淭his is a systemic problem which we urgently need to address.鈥
While Labor continues to trumpet its election commitment to , federal public servants only received a 3% rise in October.
鈥淲e do acknowledge that it is an improvement to the previous government鈥檚听wages outcomes,鈥 Community and Public Sector Union deputy national president on October 6, adding, 鈥渂ut we don鈥檛 think it鈥檚 enough, we don鈥檛 think it meets the rising cost of living鈥.
鈥淐urrent inflation is sitting around 6 per cent, so 3 per cent听is well below that,鈥 Muscat added.
High inflation and low wage growth slugs working people doubly.
On the first count, wages and welfare payments do not stretch as far as they used to: the higher the cost of goods and services means we can afford to buy less.
At the same time, high inflation encourages the Reserve Bank of Australia (RBA) to raise official interest rates to reduce demand (and supposedly reduce inflation over time).
鈥淛oin the dots,鈥 听said听on September 19, 鈥渁nd you realise the Reserve鈥檚 plan to get inflation down quickly involves allowing a transfer of many billions from the pockets of households to the profits of big business鈥.
While higher interest rates raise the price of mortgages and rents, there is no limit on the ability of big business to increase prices. Company profits rose by in the year to June听30.
Despite Chalmers鈥 fiscally tame budget, expectations are that the by up to 0.5% when it next meets on November 1.
The financial predicament for those on welfare is even worse.
鈥淲e remain deeply concerned for people who have the least and are in chronic financial distress 鈥斕齪eople who are unemployed, single parents, people with disabilities, students and people on temporary visas,鈥 Dr Cassandra Goldie, Australian Council of Social Service CEO said.
鈥淭here isn鈥檛 enough in this budget to help them right now.鈥
鈥淧eople on the lowest incomes cannot take any more,鈥 Antipoverty Centre spokesperson Kristin O鈥機onnell said. 鈥淲e cannot sustain the brutal welfare policies inflicted on us.
鈥淲e鈥檙e not coping with the price increases we鈥檝e already seen, let alone more. Electricity and gas going up means more people having their power cut off, more people in debt they can鈥檛 repay and more people homeless.鈥
The federal government has been encouraged to close loopholes in the , which would add billions to the budget by more effectively taxing the super profits being earned by gas exporters. While Chalmers confirmed that Treasury is considering possible improvements, he stressed that the was on 鈥渢he code of conduct and on prices鈥.
Health funding promises are also inadequate. Labor has refused to renew hospital funding agreements with the states struck during the pandemic, which would have maintained federal funding at 50% of costs.
The government has also for an extra 10 Medicare-subsidised visits to a psychologist, which was also introduced during the pandemic.
The budget projected the cost of the National Disability Insurance Scheme (NDIS) would over four years.
Much of the budget commentary in the establishment media has focused on the in the cost of NDIS to $35.5 billion听in 2022鈥23.
鈥淭hey need more revenue, and they need to cut spending,鈥 , political editor of the Australian Financial Review, told ABC Radio National听on October 26.
鈥淚t鈥檚 not just about raising taxes, it鈥檚 about being brave on the NDIS and really cleaning that thing out and returning it to what it was meant to do, not what it鈥檚 become.鈥
The fact that for every dollar invested and, more importantly,听it offers a pathway for persons with disability and their intimate carers, usually women, to engage with society and听in many cases听return to productive employment, is lost in the rush to cut.
鈥淪peaker, this is a responsible Budget that is right for the times and readies us for the future,鈥 Chalmers declared.
However, for those of us forced to live with it, Labor鈥檚 budget is both a missed opportunity and a threat of worse things to come.
[Graham Matthews is the听听听spokesperson.]