Budget of compassion is only halfway there
JobSeeker raise disappoints, health and energy measures welcomedThe Budget presented last night tries very hard to tick all the boxes for cost-of-living-relief but it doesn’t quite get there. Increases to JobSeeker and Rent Assistance certainly help but these forms of assistance have been so neglected that piecemeal increases just won’t suffice.
Here’s a rundown of the measures that directly affect older Australians.
Social security
The across-the-board increase to the JobSeeker Payment is welcome, of course, but mainly because anything is better than nothing, even $20 a week. CPSA notes that the Government’s own Social Inclusion Committee said the JobSeeker Payment should be 90 per cent of the Age Pension. This is a reasonable ask.
The good intentions of this Government are also on show with a 15 per cent increase in Commonwealth Rent Assistance. This will increase the maximum rent subsidy by $22 to $181 per fortnight for singles and $23 to $170 per fortnight for couples. It’s a very expensive Budget measure. Unfortunately, the rental crisis and the inadequacy in the supply of social housing and other affordable housing means that it will make little difference to those on social security payments renting in the private market.
Cost of living
There’s “up to $3 billion of electricity bill relief for eligible households and small businesses”, Government information says. The detail of what this actually means on the ground is unclear.
The Government says that from July 2023 “this plan will deliver up to $500 in electricity bill relief for eligible households and up to $650 for eligible small businesses”. What the criteria are is not clear, except that Commonwealth concession card holders will qualify.
Then there is $1.3 billion Household Energy Upgrades Fund, which will provide low‑interest loans and fund upgrades to social housing to improve energy performance. Again, who and how you qualify to benefit is not yet clear.
The Fund will also provide $300 million to partner with states and territories to make energy performance upgrades to social housing, which will benefit 60,000 renters in the form of lower energy bills.
Health
$3.5 billion has been set aside to stop the decline in general practitioners’ bulk billing. The change will apply to children and Commonwealth concession cardholders, whose GPs will receive a $20.65 bonus if they work in the city and $39.65 bonus in the country’s most rural areas if they bulk-bill. Medicare rebates rise by 4 per cent as a result of indexation.
As had already been announced, the price of 320 common medicines for millions of Australians will be halved, by doubling the medicine you can receive from one to two months’ supply. This will save a lot of people a lot of money.
Aged care
CPSA appreciates that aged care reform across residential care and home care following the Aged Care Royal Commission is a difficult undertaking at a time of staff shortages and wage pressure. The Government has provisioned well for the reforms under way with a more than $5 billion a year increase in the aged care budget.
As anticipated by CPSA, the Government will postpone the commencement of the Support at Home Program to 1 July 2025 in response to sector feedback that a longer lead time is needed and extend grant arrangements for the Commonwealth Home Support Program for a further 12 months to 30 June 2025.
It comes as no surprise that the Home Support Program, which will merge the Home Care Package Program (HCPP) with a quarter of a million clients and the entry-level Commonwealth Home Support Program (CHSP) with more than 800,000 clients, will once again be postponed by one year. It’s now highly likely that the merger will not happen in the current term of government, given that the Government would not be keen to impose increases in personal contributions on current CHSP clients just before the next election.
But it may also be that the Department of Health and Aged Care is slowly coming round to the view effectively merging the CHSP into something that very much resembles the current HCPP is not the great idea it once thought it was.
There has been a lot of criticism that very little detail was being provided of what was being planned the long-time-coming Support at Home Program. It now seems that the detail was simply not available. It seems policy makers do know how they are going to squeeze the larger CHSP into the corset of the much smaller HCPP.
Housing
The tax concessions to encourage build-to-rent housing in Australia are a positive step. While this will not solve the housing crisis, it certainly won’t make it worse.
Build-to-rent housing is supported in the Budget. The 30 per cent withholding tax on profits has been reduced to 15 per cent, making it equal to tax on profits made on building commercial buildings.
The other concession is that developers will be able to depreciate new build-to-rent building at a four per cent rate rather than the previous rate of 2.5 per cent.
Unfortunately under the Budget measure, build-to-rent dwellings will only have to be retained under single ownership for a minimum of ten years before being able to be sold, while landlords must offer a lease term of only three years.
As explained in a recent CPSA News post, moving into build-to-rent is potentially a good way to access home equity for older Australians. But it’s as if the Government has missed the point of build-to-rent housing: long-term housing security. Three-year leases are not long-term leases and do little for housing security.
Work bonus
Finally, CPSA welcomes the extension of Work Bonus until 31 December 2023, which means that pensioners can earn an additional $4,000 from paid work between 30 June and 31 December 2023 without their pension payments being reduced. Please note that this means pensioners will have another six months – from 1 July 2023 to 31 December 2023 – to use the $4,000 credit announced in late 2022.
The Budget presented last night tries very hard to tick all the boxes for cost-of-living-relief but it doesn’t quite get there. Increases to JobSeeker and Rent Assistance certainly help but these forms of assistance have been so neglected that piecemeal increases just won’t suffice.
Here’s a rundown of the measures that directly affect older Australians.
Social security
The across-the-board increase to the JobSeeker Payment is welcome, of course, but mainly because anything is better than nothing, even $20 a week. CPSA notes that the Government’s own Social Inclusion Committee said the JobSeeker Payment should be 90 per cent of the Age Pension. This is a reasonable ask.
The good intentions of this Government are also on show with a 15 per cent increase in Commonwealth Rent Assistance. This will increase the maximum rent subsidy by $22 to $181 per fortnight for singles and $23 to $170 per fortnight for couples. It’s a very expensive Budget measure. Unfortunately, the rental crisis and the inadequacy in the supply of social housing and other affordable housing means that it will make little difference to those on social security payments renting in the private market.
Cost of living
There’s “up to $3 billion of electricity bill relief for eligible households and small businesses”, Government information says. The detail of what this actually means on the ground is unclear.
The Government says that from July 2023 “this plan will deliver up to $500 in electricity bill relief for eligible households and up to $650 for eligible small businesses”. What the criteria are is not clear, except that Commonwealth concession card holders will qualify.
Then there is $1.3 billion Household Energy Upgrades Fund, which will provide low‑interest loans and fund upgrades to social housing to improve energy performance. Again, who and how you qualify to benefit is not yet clear.
The Fund will also provide $300 million to partner with states and territories to make energy performance upgrades to social housing, which will benefit 60,000 renters in the form of lower energy bills.
Health
$3.5 billion has been set aside to stop the decline in general practitioners’ bulk billing. The change will apply to children and Commonwealth concession cardholders, whose GPs will receive a $20.65 bonus if they work in the city and $39.65 bonus in the country’s most rural areas if they bulk-bill. Medicare rebates rise by 4 per cent as a result of indexation.
As had already been announced, the price of 320 common medicines for millions of Australians will be halved, by doubling the medicine you can receive from one to two months’ supply. This will save a lot of people a lot of money.
Aged care
CPSA appreciates that aged care reform across residential care and home care following the Aged Care Royal Commission is a difficult undertaking at a time of staff shortages and wage pressure. The Government has provisioned well for the reforms under way with a more than $5 billion a year increase in the aged care budget.
As anticipated by CPSA, the Government will postpone the commencement of the Support at Home Program to 1 July 2025 in response to sector feedback that a longer lead time is needed and extend grant arrangements for the Commonwealth Home Support Program for a further 12 months to 30 June 2025.
It comes as no surprise that the Home Support Program, which will merge the Home Care Package Program (HCPP) with a quarter of a million clients and the entry-level Commonwealth Home Support Program (CHSP) with more than 800,000 clients, will once again be postponed by one year. It’s now highly likely that the merger will not happen in the current term of government, given that the Government would not be keen to impose increases in personal contributions on current CHSP clients just before the next election.
But it may also be that the Department of Health and Aged Care is slowly coming round to the view effectively merging the CHSP into something that very much resembles the current HCPP is not the great idea it once thought it was.
There has been a lot of criticism that very little detail was being provided of what was being planned the long-time-coming Support at Home Program. It now seems that the detail was simply not available. It seems policy makers do know how they are going to squeeze the larger CHSP into the corset of the much smaller HCPP.
Housing
The tax concessions to encourage build-to-rent housing in Australia are a positive step. While this will not solve the housing crisis, it certainly won’t make it worse.
Build-to-rent housing is supported in the Budget. The 30 per cent withholding tax on profits has been reduced to 15 per cent, making it equal to tax on profits made on building commercial buildings.
The other concession is that developers will be able to depreciate new build-to-rent building at a four per cent rate rather than the previous rate of 2.5 per cent.
Unfortunately under the Budget measure, build-to-rent dwellings will only have to be retained under single ownership for a minimum of ten years before being able to be sold, while landlords must offer a lease term of only three years.
As explained in a recent CPSA News post, moving into build-to-rent is potentially a good way to access home equity for older Australians. But it’s as if the Government has missed the point of build-to-rent housing: long-term housing security. Three-year leases are not long-term leases and do little for housing security.
Work bonus
Finally, CPSA welcomes the extension of Work Bonus until 31 December 2023, which means that pensioners can earn an additional $4,000 from paid work between 30 June and 31 December 2023 without their pension payments being reduced. Please note that this means pensioners will have another six months – from 1 July 2023 to 31 December 2023 – to use the $4,000 credit announced in late 2022.
