Victorian Government budget leans towards those on the margins
How will the latest Victorian government budget support the daily lives of its more vulnerable constituents? Denis Fitzgerald (@FitzgeraldDenis) from Catholic Social Services Victoria highlights promising funding changes in the new Labor budget and calls for community input to enhance the equity of future budgets.
Victorian Treasurer Tim Pallas MP brought down the Andrews Government’s first budget on Tuesday 5 May. The budget was largely aligned with pre-election commitments, and tended to favour those on the margins of our society.
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While the Commonwealth Government budget attracts more attention - due in part to its direct financial impact on nearly every household through income taxation, pension payments, etc - the Victorian budget is very important to residents of the State.
It provides for police and emergency services, and most of our transport infrastructure and services. The Victorian Government is the major funder of education in the State; it funds public hospitals, and much of the safety net that supports vulnerable Victorians.
The recent budget provides for recurrent expenditure in 2015/16 of $54bn, plus a further $17bn capital expenditure.
The budget measures that are announced each year provide an insight into the priorities of the Government. These are necessarily very broad ranging, but, in the case of the Victorian Budget, there was a welcome emphasis on the needs of those on the margins of our generally prosperous society.
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The budget forecasts a steady improvement in Victoria’s overall economy – steady economic growth, and growth in employment; unemployment gradually falling, to 5.75% in 2018; and a population continuing to grow at a relatively high 1.8%.
And it takes a generally cautious approach to economic management. It provides for a continuing budget surplus (1.2% of the Victorian economy in 2015/16); and, as a proportion of Victorian economic activity, it provides for a reduced level of Government debt, and a stable level of infrastructure investment.
As expected, new taxes were not a major feature of the budget, but nor were there significant tax reductions. This is important, as it maintains revenue in a heavily constrained expenditure climate. ‘Tax expenditures’ – revenue foregone because of exemptions, etc – was also largely unchanged. The largest single element here, the land tax exemption for principle places of residence, costing $1.2bn, is a regressive measure.
There are value judgements inherent in such caution and such allocations. They do not leave much room for additional expenditure, which means that many pressing needs cannot be funded – more on this below.
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Changes in budget expenditures reflected both changes in the environment, and policy preferences.
Education programs fared well in the budget, with expenditures increasing by 5.3%, to $12.7bn. The increase reflected growth in numbers, but also a focus on equity measures, including a fund to assist with participation in school camps and excursions.
Funding for child protection and family services increased substantially, by 17% to $990m. Additional child protection workers and additional funding for out-of-home care was needed to help address increased demand – sadly, the budget papers forecast a significant rise in the number of reports to child protection over the coming year, which, they observe, are ‘driven by a range of factors including family violence report and greater public attention on child abuse’. But there are also welcome increases in funding for preventative work, and for assistance to young people moving out of out-of-home care.
Public housing and social housing did not fare as well. While good work is being done, the bottom line is that the number of social housing units in Victoria is budgeted to decline over the coming year, in a situation where there is already a significant shortage. This gap in our social support system impacts on many vulnerable people, who are unable to effectively address issues of substance abuse, transition from prison, escape from family violence, etc because of the shortage of safe and suitable housing. It offers little hope to those who are homeless, and places many others at risk of homelessness.
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The Andrews Government was elected on 29 November last year. This first budget reflected priorities and values that leant towards Victorians who are doing it touch, and it was aligned with much of what was presented prior to the election. Over the coming three years, the voice of the Victorian community will help determine the extent to which future budgets reflect a commitment to the more vulnerable Victorians, in the interests of the community as a whole – its up to all of us!
Posted by Lara Corr @corr_lara