A budget for the post-pandemic age, with both record funding and missed opportunities

In this article, we focus on the key takeaways of the 2022 Federal Budget for Moores’ clients in the sectors we serve.

The 2022-2023 Federal Budget, described as Australia’s ‘plan for a stronger future’ promises to deliver more jobs, and provide cost of living relief to millions of Australians. It also promises to invest in growth in regional areas, health and aged care, education, women’s safety, and national security.

The Budget, branded as a response to the increasing cost of living, proposes reductions in fuel costs, one-off tax free payments of $250 to pensioners, welfare recipients, veterans and concession cardholders, and an expansion of the tax offset for low and middle income earners. Eligible taxpayers will benefit from a $420 increase in their tax returns this financial year.

Despite this, critics observe that the Federal Budget fails to provide sustained measures to support Australians with the soaring costs of living, with the benefits proposed effectively expended within the next six months. The Budget Papers describe these measures as “temporary and targeted” – perhaps disproportionately so, in light of predictions that wages will remain largely stagnant while interest rates continue to rise.

Rather, the Federal Government’s plan for a stronger future appears to focus its sights on increased workforce participation.

Education

The Budget promises an additional $225.8 million to improve educational outcomes for school students, particularly for vulnerable and disadvantaged students, Aboriginal and Torres Strait Islander students, and students in regional and remote areas. Notably, Schools will receive a further $6 million to support respectful relationship education for primary and secondary students. The Australian Human Rights Commission will be funded to survey high school students about consent education.

Levels of exhaustion remain high amongst students, staff and parents, particularly those who faced extended lockdowns or natural disasters. In recognition that no learning is effective without the foundation of student wellbeing, the Budget promises $9.7m to assist schools and teachers to better respond to student mental health and wellbeing concerns.

School funding for non-government schools continues apace with the Budget providing $62.4 million for initiatives that will enable better educational outcomes via the National School Reform Fund and the Non-Government Reform Support Fund. Funding will also be increased for the ‘Emerging Priorities Program’ which will support schools to respond to emerging priorities in the sector, including COVID-19 recovery.

Funding needs in this sector remain high, as the change in the profile of independent schools continues to see the sector growing in the lower-fee (and higher funded) schools. The budget is stated to be committed to supporting parent choice. By extension, this could also be seen as recognition that this sector is incredibly diverse and, in many cases, schools are regarded as the platform which is responsive to the cultural and religious needs of local community in many communities.

Key announcements for early childhood included Community Childcare Fund (CCCF) measures, namely:

  • $19.4 million over 5 years from 2021-22 to establish a new open grant round of the CCCF to support the establishment of new child care services in rural, remote and regional areas where there is limited supply of current child care services
  • $22.1 million over 2 years from 2021-22 to increase the CCCF, Special Circumstances grant to assist services experiencing financial viability issues resulting from the recent floods and the COVID-19 pandemic

Other than these initiatives, early childhood perhaps felt neglected by a budget that was quite silent on the question of childcare affordability, workforce investment and the funding of additional pre-school hours. With childcare continuing, for better or worse, to be a “women’s issue”, it appears the government is relying on previously announced changes to the Childcare System and its introduction of a type of shared paid parental leave to seek to address concerns.

Moores welcomes the initiatives which prioritise the mental health and safety of students, which are vital to ensuring a culture of child safety in the education sector, and also advancing equality at large.

Industrial relations

Reforms to the operation of the Fair Work Commission were also foreshadowed, with funding allocated to establishing a dedicated small business unit to assist small business employers to navigate their workplace obligations. Businesses and employees will continue to be supported in managing workplace issues related to the COVID-19 pandemic, with further funding for the Fair Work Ombudsman until September 2022.

Changes to the National Employment Standards also form part of the 2022 Budget, with the expansion of the Paid Parental Leave Scheme broadening the Scheme’s eligibility, providing single parents with an extra two weeks of government-funded paid leave, and affording multiple-parent households greater flexibility in determining who takes up the leave. Noting this flexibility falls short of the “use it or lose it” model which has been deployed in some European jurisdictions, with the result that many more fathers took parental leave, we will watch the outcome of this initiative with interest. (Currently, primary carers are able to take 18 weeks of paid parental leave, and secondary carers only two weeks).

The Budget also foreshadows plans to amend redundancy payment calculation methods, to ensure redundancy packages reflect an employee’s average working hours during the course of their employment. Importantly, the proposed amendments will better recognise the service of employees who have shifted between full time and part time work due to caring responsibilities.

Disability

The Budget promises to provide an additional $7.3m in spending for people with disability and their families, largely allocated to a national advertising program to assist jobseekers with disability. However, peak bodies in the sector consider that the sector’s main challenges remain unaddressed. As evidenced by the recent progress report published by the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability, access to adequate NDIS funding remains a key concern for people with disability in Australia. The National Disability Insurance Agency has in recent times faced a 300% rise in appeals by NDIS participants, but disability support advocates were not afforded additional funding in the Budget.

Aged care

Funding for the aged care sector will see additional home care packages, extended care time for residents of aged care facilities, and 33,800 new training places for aged care workers. The Budget also commits $340 million to embed pharmaceutical services in aged care facilities, with the hopes of improving medication management. Many critics have questioned whether these initiatives are adequate for improving the health and wellbeing of older Australians, who remain some of the least visible and most vulnerable members of our national community.

Peak bodies in the aged care sector have also called upon the Federal Government to increase wages in the sector to attract and retain skilled workers, a recommendation of the Royal Commission into Aged Care. Disappointingly, the Budget does not address this. The Fair Work Commission (Commission) is set to hear an application for pay rises in the sector by the Health Services Union and Australian Nursing and Midwifery Federation, who argue that current wages fall short of the Fair Work Act’s requirement to ensure a safety net of fair minimum wages. Moores will await the Commission’s decision with interest, and hopes for better outcomes for aged care providers and workers.

Safeguarding

Moores welcomes the continued commitment to aligning regulation across the care and support sector, including for providers in aged care, veteran care, and disability services. Alignment will enhance the quality and safety of support services delivered to vulnerable Australians, while reducing regulatory burdens on providers caused by duplicate obligations. Moores looks forward to improved information sharing between industry regulators, and more efficient reporting processes for service providers.

Women

The 2022 Budget will build upon on the previous year’s focus on investing in women, bringing total funding across 2021-2023 to $5.5 billion. The Government states this funding will target three priorities: women’s safety, women’s economic security and leadership, and women’s health and wellbeing.

Safety-based initiatives include funding for frontline family, domestic and sexual violence services, including services that are culturally appropriate for Aboriginal and Torres Strait Islander communities, and people from culturally and linguistically diverse backgrounds. Our Watch will be funded to boost its efforts in violence prevention for women with disability, people in the LGBTQIA+ community, and women from migrant backgrounds.

Funding will also be devoted to combatting workplace sexual harassment. Moores welcomes recognition by the Federal Government that addressing sexual harassment in the workplace is integral to advancing women’s participation in the workforce, as well as women’s safety. The Budget promises to further implement the recommendations provided by the Respect@Work: Sexual Harassment National Inquiry Report, including by establishing a dedicated team in the Australian Human Rights Commission for assisting industry to respond to historical complaints of sexual harassment.

The Budget Papers provide for additional initiatives to support women’s workforce participation, with changes to the Paid Parental Leave Scheme promoting increased flexibility for families and equitable care arrangements between parents of all genders. Increased funding will also be provided to the Family Friendly Workplaces initiative, to ensure a further 500 workplaces across Australia are supported to increase flexibility for their workforce. The focus on women’s workforce participation also includes further investments in the Workplace Gender Equality Agency, the statutory body responsible for promoting gender equality in Australian workplaces.

The Budget further promises to invest in initiatives to support women to take up opportunities in under-represented sectors, including trade occupations and the manufacturing and tech industries. These investments will be key to ensuring the Government delivers on its aim to increase women’s workforce participation, having regard to the minimal budgetary consideration for sectors where women are most represented, compared with the promised $17.9 billion infrastructure package. Recent research conducted by the Australia Institute demonstrates that while every million dollars spent on education creates 10.6 jobs for women and 4.3 jobs for men, every million dollars spent on construction creates only one job for men and a mere 0.2 jobs for women.

Charities and not for profits

It was a relatively quiet budget night for charity and not-for-profit regulation, and for the sector’s regulator, the Australian Charities and Not-for-profit Commission (ACNC). Pleasingly, the Budget did announce that up to 28 community foundations affiliated with Community Foundations Australia would receive specific listings as Deductible Gift Recipients (DGRs) from 1 July 2022. These listings will increase the scope and impact that these foundations can have in their local communities and will greatly assist with much needed grass roots initiatives.

The Portfolio Budget Statements note that the ACNC will continue its compliance drive in the upcoming financial year, with a goal to review 2% of charities that have been registered with DGR status. Previously, the ACNC had committed to reviewing 500 registered Public Benevolent Institutions per year, so this new measure may increase the scope of charities with DGR status that could be subjected to ACNC scrutiny.

The Budget has also allocated $1.9 million in funding to the Australian Taxation Office to build a system for the implementation of the previously announced annual reporting requirements for self-assessing not-for-profits. Eligible not-for-profits should pay careful attention as these systems are developed and put into practice.

Social housing

While the States are ploughing funds into the increase of social housing stock, the Federal Government appears intent on seeking to enable home ownership for more Australian families. The Budget will fund 50,000 ‘Home Guarantee Scheme’ places in the coming financial year, in addition to a new ‘Regional Home Guarantee’ and increased placed under the ‘Family Home Guarantee’ for single parents.

The Budget will also increase the amount of cash that can be released from superannuation accounts under the ‘First Home Super Saver Scheme’ – a regime that allows people to save for a deposit within their superannuation fund (giving an effective tax cut to savings put aside for your first home).

None of these measures appear likely to decrease the demand for social housing. They will, however, introduce additional home buyers into the market which is likely to exacerbate price pressure in a housing market where affordability is already a significant challenge.

One positive measure for social housing is the increase in the NHFIC liability cap by a further $2 billion, lifting to a total liability cap of $5.5 billion. This will increase the capacity of NHFIC to provide (or re-finance) long term debt for social housing providers. Interest savings will increase the borrowing capacity of social providers and hopefully enable them to seize opportunities to use debt finance for the delivery of new housing.

How we can help

Moores is pleased to see a number of worthy sectors and causes provided for in this budget, but looks forward to further investment in the welfare and social assistance sectors in future.

The team at Moores has expertise and experience in key sectors including education, safeguarding, social housing, not-for-profit and workplace relations. We use our strong commercial sense and practical experience to make a positive impact in our client’s lives and organisations.

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