The Government on Cost-of-living

This is part 1 of a 5 part series

The Australian Federal Budget is a document that contains the country's fiscal performance, policy, and projections. It's a big book, with a lot of data that goes over my head, reminding me why I hate maths. Importantly, It is very useful to find out what the government is doing.

On the 9th of May, the Australian Treasurer Jim Chalmers of the Albanese Labor government released the 2023-24 Federal Budget. This is the second budget delivered by the regime. After 10 years of a severely corrupt government poorly handling multiple major disasters on both a national and global scale, people are looking to The Prime MInister to fix Scott Morrison’s damage to our institutions.

Trying to understand what is being done, I decided to go through most of the policies written in the budget and research them on a basic level. From there I hope to delve further into the more interesting ones at a later date.

~

This article will focus on the governments first priority

Responsible and targeted Cost-of-living relief

The goal is not to express opinions on how the government is doing. What I want out of this video is a basic understanding of all the major moves by the government, and to collect questions about each one to make more critical insights into whichever policies arouse the most interest.

With that in mind, Please ask any questions you have in the comments or on the document in the description, the more I have the better my future videos will be. 

Lightening the Burden of existence was a touted Labor party promise before the election, it's also a part of modern labour movement ideology, and most importantly, is just common sense for an elected government to be seen tackling as it directly affects massive portions of the voting population.

Important to remember here is the word “responsible” which implies limited impact to the government's coffers.

There are three main areas in The federal budget to help with Cost-of-Living: Financial Assistance, Housing Supply, a.

Policies:

FINANCIAL ASSISTANCE

~

Changes to Single Parent assistance will address money troubles and job difficulties faced by Single Parents due to additional responsibilities by giving them ~$922 per fortnight until their youngest child turns 14.

Before the changes, parents with over eights went on “single with dependent” Jobseeker, which paid ~$177 less… among other things. Labor also increased income eligibility to ~$2’600. The fact that women are 91% of single parents also promotes gender equality.

This policy change will affect roughly 57’000 people, so if you are a single mum with a bedwetter son, you might want to look into these changes and rake in the extra DrynNite nappy money.

~

There will be increases to Job Seeker and Youth Allowances of $40 a fortnight on top of increases from inflation. 

To relieve cost of living pressure the government has upped how much those on working age benefits receive. This is especially the case for those who are over 55. Mature aged recipients of jobseekers have become significantly more common in the past decade, likely due to factors like poor health and no one wanting the smelly old farts in their workplace. Due to this reliance, the government is extending jobseeker payments to those from 55 to match with those 60 and over, affecting roughly 52’000 Australians. 

As for the youngins, hopefully that added $40 will help you until your twitch career takes off…or at least pays the rent until you score a stint at the Servo.

~

Wages for aged care workers will be increasing. The government has moved $11.3 billion towards increasing the wages of 250'000 workers with a stated goal of continuing to improve wages until they reflect the proper worth of aged care workers. 

These increases are based on the Fair Work Commissions  decision to provide an interim increase of 15% to minimum wages of aged care workers. This also means that the people most affected by wage increases will be those who are most affected by recent problems like inflation, low waged workers.

~

IMPROVING SUPPLY AND AFFORDABILITY OF HOUSING

~

Resolving housing problems is a stated key priority of the current government. The Federal Budget lays out 6 noteworthy policies to tackle housing problems: increased rent assistance, investment in housing supply, local and state reforms to increase housing supply, Expanding Guarantee eligibility, Homelessness funding, and Social/affordable housing.

I intend to explain each of these policies in separate videos so make sure to subscribe or search through my video library to find out more.

~

Commonwealth rent assistance will be increased by 15% to 1.1 million households. 

Rent assistance is a supplementary payment, meaning it's paid on top of an existing social security payment like Jobseeker. This is given to people paying rent to private houses, so doesn’t apply to those living in housing commissions or their own home.

Costing 2.7 billion dollars over 5 years the government's goal is to reduce cost of living pressure for low income renters by mitigating the effects of increased rents. 

This certainly won't solve the housing crisis on its own, and there are lots of other moves being made to make living under a roof easier, Follow for more.

~

First change is increasing the Capital works tax deduction, reducing taxes on house renovations for landlords from 2.5%-4% so companies that make new build-to-rent properties can get tax money back.

Developers would need the project to consist of 50 or more dwellings available for rent by the public or offer a lease term of at least three years for each dwelling. So benefit will only apply if the buildings are actively being rented out, possibly meaning fewer houses will be left unoccupied collecting dust.

This is on top of reducing tax that Managed Investment Trusts have to withhold for the government from 30% to 15%, increasing foreign investment in development.

~

Essentially Local councils - through the Australian Local Government Association - and Ministers are hashing out a plan where local governments will be given money to spend on solving housing affordability.

ALGA is advocating for $100 million per year from the government to help them deal with this issue, with their pre-budget statement saying it will be used for activities like Land Audits, Partnership developments, and housing model research to name a few. 

The Local Government Association cites their desire to solve the housing crisis is due to the struggle of towns to find accommodation, with The unique housing challenges each shire faces being their justification for playing a larger role in helping housing.

I guess local councils may soon be useful for more than just bin days.

~

Home Guarantees are Australian government initiatives that allow eligible people to have part of their loan guaranteed by the Government through the National Housing Finance and Investment Corporation or NHFIC, allowing you to get a home loan for a deposit as small as 5%.

The government intends to expand Guarantees for First Home and Regional First Home buyers. Now any two borrowers, even those not in a relationship can apply for a First Home Guarantee, along with those who owned a property in the past but haven’t for 10 years. Family Home Guarantees are also expanded to single legal guardians of children rather than just biological parents.

~

How is homelessness handled by the government? 

$67.5 million dollars has been added on top of the previous funding provided by the National Housing and Homelessness Agreement, or NHHA, which provides roughly $1.6 billion each year to states and territories with the aim of improving housing accessibility.

The NHHA also requires the state's strategies to address priority policy areas like Social Housing, tenancy reform and home ownership, on top of requiring particular care around certain cohorts like Children, elderly, and those undergoing repeat homelessness.

As the new agreement is negotiated, factors like the previous agreements success in reaching objectives, adequacy of the data, and the impact of economic factors among other things will be reviewed to determine what improvements should be made.

There is a long way to go, but with enough effort, using Park benches for anything other than a place to sit, and sex, could be a thing of the past.

~

Scotty Cam might like renovating houses, but just like his promotion of the inferior Mitre 10 he pales in comparison to the bunnings warehouse of construction that IS the federal government.

The government has created an agenda to deliver more social and affordable housing through increases to the National Housing Finance and Investment Corporations liability cap by $2 billion dollars, making it $7.5 billion all up.

This gives low cost loans to Community Housing Providers. This is projected to build 7000 more homes directly. 

There has been a lot of talk about this policy not going far enough. I would be interested in hearing your thoughts and questions about it in the comments below.

~

ENERGY PRICE RELIEF

~

The Federal budget describes an Energy Price Relief Plan designed to shield Australia from price increases via Price Relief.

The government says the reason behind this plan is to mitigate the effects of the Ukraine war which have exacerbated power prices in the country.

Policies in this area are as follows:

~

After over 60 consultation submissions between December and February and a second round in late April, the Commonwealth are committing to a mandatory code of conduct for gas sales with the goal of making sales to consumers fairer. 

The draft for this code includes potential actions to regulate the way gas suppliers conduct business, resolve disputes, and even require people to sell gas at set prices in particular circumstances. 

This could possibly reduce the cost of gas by forcing suppliers to sell gas at a set price in the local market, which makes sense as Australia is one of the largest gas producers, and should not have some of the highest gas prices.

~

$3 billion dollars of electricity bill relief. Up to $650 for small businesses and $500 for households, This initiative in partnership with states will offer bill refunds. The goal of these rebates is to reduce pressure on vulnerable households.

Generally those with Seniors cards, carers allowances, or low income health cards to name a few will receive these rebates.

In most cases those eligible don't need to do anything, it will automatically apply to their next power bill. Because this is in collaboration with the states it may vary in how much you get and how it happens. 

~

The government could be giving out free washing machines!

$1 billion dollars is being added to the Clean Energy Finance Corporation, a specialist investor and self described “green bank” to enable 110’000 low interest loans for energy saving home upgrades in collaboration with other private lenders. 

The effect of upgrading a home’s energy rating from a 1/10 star to a 3/10 star can reduce an energy bill by 30%, and by a further 20% if upped to a 5/10 star home.

$300 million dollars will also be spent to cut energy bills for 60’000 Social Housing properties by upgrading their energy performance in collaboration with the states.

If your power bill doesn’t empower you, and wouldn’t mind some sleek electronic upgrades, it might be worth checking this out.

~

Grand strategy games are fun for people who like scratching their itch for detailed economy management. Makes you wish you could do the same for your own personal life. Luckily The Australian government is working on a way for you to do just that with your power prices. 

$36.7 million dollars will be used to increase government energy efficiency standards and information, including an expansion of the nationwide House Energy Rating Scheme to cover both existing and new buildings, allowing people to make more informed decisions.

~

CONCLUSION: Cost of living is certainly the most publicised policy area of this year's budget and with good reason. The numbers certainly seem modest, but that is not too surprising for a new government that is often heavily criticised by the 4th estate for its expenditure. In terms of where the money is going, I personally think it's going to the right places, But I would like to know what you think, so please, if you have any questions about any of these policies leave a comment.