Per Capita’s 2019 Budget Response

Per Capita’s 2019 Budget Response

Federal Budget 2019: A Missed Opportunity to Address Inequality in Australia

by Emma Dawson, Executive Director

Treasurer Josh Frydenberg’s first budget fails to grapple with the big challenges facing our nation.

The centrepiece of the Government’s pre-election budget is personal income tax cuts aimed at middle-income earners, but real measures to address the growing inequality in our society are absent.

For someone earning $50,000 per year, the tax cuts announced tonight are worth only around 57% of the extra money that would be in their pay packets if wages were growing at the long term average of 3.5%. Yet the budget includes no measures to address sluggish wage growth, and for those earning under $40,000 per year there is nothing at all. 

Most disappointingly, and for the 25th year in a row, the Government has ignored calls to increase the rate of Newstart. Excluded even from the meagre energy supplement awarded to other recipients of pensions and income support, unemployed Australians living on less than $40 per day are the forgotten people of this budget.

And even though we know that one of the most effective things we can do to reduce inequality is to invest in our children, the government has failed to deliver on early childhood education. With only one year’s funding for four-year-old kinder, and nothing at all for three year olds, the budget has not provided the certainty that parents and early childhood educators need to ensure that our kids get the best start in life.

If Australia is to avoid becoming a permanently stratified society, in which only those born to wealthy parents can expect a good standard of living, we cannot continue to ignore the structural causes of inequality that are eroding the basis of our egalitarian nation.

Sadlly, this budget appears to do exactly that.