Yahoo Finance The forgotten Aussies in this budget
On the whole, the budget delivered, but young people are being left behind.
Did this year’s budget deliver? That’s the question everyone wants an answer to.
In my opinion, yes. There have been great gains in the resources sector, which has allowed Jim Chalmers the gift any treasurer could ask for - delivering a (modest) surplus.
This budget has good elements - for women, climate and our society's most vulnerable - however, it doesn’t address the middle bracket of young people who are not eligible for welfare, but are still impacted by the cost of living and housing affordability.
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Don’t get me wrong, there were good bits from the budget announcement, but I want to focus on the areas that were not sufficiently addressed - or missed entirely - and their impact.
It’s said that Prime Minister Anthony Albanese got to victory thanks largely to women voters and those under 55. Today, many young people will no doubt be feeling frustrated that they were almost entirely left out. It has been widely publicised that young people are not making the same economic gains as the generations before. In fact, data suggests that the wealth of those aged under 35 managing households has moved very little since 2004.
Throw in an inflationary period most young people have never seen in their lifetimes, and soaring house prices, many are feeling frustrated and condemned to living in financial stress. The dreams of a picket fence marched off many moons ago, now it is genuinely aspirational for a lot of young people to be able to have a rental property in an area with average liveability, that isn’t on the verge of being declared uninhabitable.
Housing affordability
When I moved out of home at the ripe old age of 18 to chase the bright, shiny lights of the big city, I knew it was going to be tough. But I felt I had no choice. I grew up hours away from Sydney, in an area where it appeared my main job prospects would be in hairdressing or beauty - neither of which I was interested in nor dexterous enough to pursue. It was a massive blow to the $9k I had managed to save working my three jobs in high school. The first month's rent, bond and a handful of second-hand items scoured from garage sales chewed through most of that.
But I was one of the lucky ones, because this was more than a decade ago - when rents were nothing like today - and I landed myself in a reasonably well-paid job inside Finance. But the world has changed. And rather than lamenting eras of 18 per cent interest rates and perpetuating the generational divide that too often gets all the airtime, we must get serious on the realities of young people right now.
It is a fact that we currently have a huge housing problem on our hands and Tuesday night left much to be desired when it comes to adding extra supply. Rental prices on homes are up 13 per cent over the past 12 months, and units have risen more. On average, people are forking out 22.2 per cent more in just the past year alone. March also saw a record for low vacancy rates, making finding and securing one like something from The Hunger Games. With net migration set to be 300,000 for this year, the question is: where will they live? How much more unaffordable will the rental market need to get before we see government support? Generally, any time someone is spending more than 30 per cent of their income on housing, we would consider them to be in ‘housing stress’. I dare say most young people would fall into this category if they have flown the coop.
While the budget is committing to additional housing for vulnerable people, it is grossly inadequate for the growing need. The Housing Australia Future fund - to which $10 billion has been pledged - aims to build 30,000 homes over the coming five years. Perhaps a smarter move would be to take some of those funds and build more right now?
There have been increases for those on rental assistance (hoorah!). But, for those who do qualify for rental assistance, it will be going up $31 per fortnight (hold the cask Prosecco). This, my friends, amounts to the grand total of $2.20 a day. Given the enormous rental increases we have seen across Australia, this doesn’t hit the mark in helping young people out with their largest cost, housing.
There are additional measures that could be used to help create extra relief for renters, such as more rent-to-buy schemes, and support for those who are under 30 and living out of home in a capital city so they have an opportunity to build up a deposit. Failing to address this will not only see more and more people squeezed out of renting in capital cities, it will no doubt impact quality of life and mental health and likely mean more people will need access to social housing in their later years, having never been able to get on the property ladder.
We did see some changes to help those looking to buy property - the Home Guarantee Scheme. A subtle acknowledgment that it’s highly unlikely you can buy a property today on your own. Buying with a sibling or friend might sound enticing but there are many elements that would need to be thought through for the sake of your relationship.
Support for women and parents
Katy Gallagher, the Minister for Finance and Women, said women were "front and centre" of this budget. But did it hit the mark?
I applaud some of the budget announcements, like the increase to parenting payments - with the cut-off age moving from eight to 14 - increases to aged-care workers’ wages, and additional subsidies for health care. Yet we still have a long way to go.
For example, the stage three tax cuts for people on $200,000 is double the value of upped payments to single mums who earn under $30,000 a year.
Should we not be supporting single parents that have school-aged children? What about increasing the funding for child care that is outside ‘the normal child care’ hours for single parents working shift work or evenings?
The treasurer announced an additional $590 million over four years to address the domestic violence crisis that lives in our communities. Yet, experts believe we need a whopping $1 billion a year in resources.
We also saw financial-abuse support almost entirely miss out on funding, despite it affecting almost all socio-economic groups and disproportionately impacting women. This is hugely frustrating. We know it is widely misunderstood, underreported, and has significant economic impact.
The 10 days of domestic-violence leave will help many women who need to flee and escape dangerous relationships and restart their lives.
Additional funding for those over 55 - many of whom are older women - was also announced. The real question is: will this be enough to keep them off the poverty line?
So, in summary, unless you are already eligible for benefits or you have a family, if you’re young, it’s likely you feel you missed out in this budget. The cost-of-living pressures will continue, wanting a roof over your head will remain a competitive sport, and real security for our most vulnerable women and children may improve marginally, but there is much more work to do.
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