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Wednesday, June 16, 2021

ACT households fare ‘better than most’ from Budget

Touted as a big-spending, job-focused Federal Budget, the Morrison Government’s big-ticket items included a wage subsidy for young workers, a gas industry cash injection and personal income tax cuts aimed at stimulating spending.

Opposition Leader Anthony Albanese’s Budget Reply countered with structural change in childcare subsidies, the expansion of Commonwealth social housing stock and establishment of a federal anti-corruption commission and centre for disease control.

Associate Professor Ben Phillips from the Australian National University Social Research Centre said ACT households were likely to do “better than most” from the Budget, because average incomes were higher here than most other cities and regions.

“The tax cuts tend to mostly benefit middle- and high-income households and Canberra has a relatively high share of higher income households,” he said.

As expected, the already reduced $250 JobSeeker supplement will end in December.

One million Australians became unemployed during the Coronavirus recession, but ABS labour force statistics show a bounce-back in jobs, with the return of 111,000 jobs reducing the unemployment rate to 6.8%.

These job figures reflect a “two-speed economy” between Victoria and the rest of the country and do not account for the steady rate of underemployment (worked at least one hour a fortnight) of 11.2%.

Associate Professor Phillips said “ideally” the Budget would have committed to a permanent increase in the JobSeeker payment.

“This would be beneficial to the millions of unemployed persons around the country during COVID. To some extent, Canberra is insulated from this, though, with our relatively low unemployment rate,” he said.

ANU Professor in Higher Education Policy, Andrew Norton, was surprised by the Government’s once-off billion-dollar university research funding but said he expect universities in the ACT to get around $70 million.

However, Professor Norton noted that budget week also saw the Government’s Job-ready Graduates legislation pass through the Senate. It redistributes the cost of degrees away from delivery cost towards national employment priorities.

“It will reduce the average per-student funding rate by 6%,” Professor Norton said. “This will cause long-term problems for all public universities.”

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