Frydenberg’s budget a missed opportunity on sensitive issues


The $98 billion of spending announced in Tuesday’s budget should successfully support the economy through the COVID-19 recession but it has left some key constituents disappointed.

The budget has relied mostly on economy-wide cuts in business and personal income tax to stimulate the economy. Treasurer Josh Frydenberg says he does not like to tell people how to spend their money.

Yet that choice raises questions about areas from aged care to social housing which have largely missed out in this budget.

One large group which deserved more consideration is older women who have either been unemployed for a long period of time due to a stalled job market or have been otherwise disadvantaged by the pandemic and its ensuing recession. Many of them thought the government might have been able to tailor more support for their predicament, given how disproportionately hard they have been hit by the coronavirus recession.

Perhaps sensing his vulnerability on the issue Mr Frydenberg offered a “women’s economic security” package, but at a cost of just $240 million over five years it looks tokenistic.


Prime Minister Scott Morrison says there are other programs which are designed to help these individuals, however it would seem they have not been effective so far.

Another choice which could come at some political cost is the decision to restrict the JobMaker hiring credit to workers under 35. Mr Frydenberg says under 35s are most likely to be scarred for life by a bout of long-term unemployment. Unfortunately, the targeted approach highlights the relative lack of support for older unemployed workers who in this recession are more likely to be women.

The budget is also a missed opportunity to increase spending on aged care despite the clear need to lift the appalling standards of care at many homes exposed by the pandemic. Funding aged care would also create lots of jobs, especially for women, and stimulate the economy.

The government says it is waiting for the final report of the royal commission into aged care before announcing more cash but the budget should have included a firm pledge with some dollar signs.

The budget’s failure to decide the future of JobSeeker will also add to economic uncertainty for the 8 per cent of the workforce expected to be unemployed by the end of the year. They are fearful their benefit will drop to the pre-crisis Newstart dole allowance. The government says it will make a decision before JobSeeker expires at the end of the year but it is hard to see what it is waiting for.

The government has also largely ignored calls from economists to stimulate the economy by investing in social housing. Without budget support, investment in new housing is expected to fall 11 per cent this year.

The government can argue that it relies on business and consumers to power the recovery. Yet the discovery of the first three cases of community transmission of COVID-19 in NSW in 12 days is a necessary reminder of how fragile the situation is.

Large outbreaks could still undermine the improvement in business confidence and consumer sentiment and the reopening of borders on which the budget’s forecast for a return to growth next year is based.

The federal government should consider more targeted programs, which will ensure no one is left behind – especially if the tax cuts in the budget fail to buck up consumers or stir the animal spirits of business.

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