What does the budget mean for you?

Friday 16 May, 2014

Budget Wrap

After days of commentary, analysis and grandstanding by politicians… you could be forgiven for not wanting to hear or read anything more about the Federal Budget, but if you’re a jobseeker or a worker, there are a few changes that are worth you knowing about, so we thought we’d be a pal and sum them up for you.

 

Learn or Earn

If you’ve just left school or are a new jobseeker, the government’s social reform package includes new rules that mean you’ll need to wait six months to receive Newstart or Youth Allowance. Once the waiting period is over, the government will provide you with six months’ worth of income support, but you’ll be required to work 25 hours per week in a “work for the dole” program.

And it doesn’t stop there… as part of the government’s welfare reform package, unemployed people younger than 25 will be pushed off Newstart and onto the lower-paying Youth Allowance. Previously, young people could apply for Newstart at 22 years.

The changes are supposed to get more young people into jobs or training and reduce the incentive to stay on the dole, but it has welfare groups up in arms who say the move will further entrench the disadvantage experienced by youth. Currently youth unemployment in Australia is more than twice the national average at 12%. Whether the government’s tough love approach will work, remains to be seen.

Retirement Age

You’ve probably heard by now that the pension age is set to rise to 70 by 2035. There was an air of inevitability about this one though, mainly because it seemed like the only logical solution to meeting the demands of our ageing population. The longer we are living, the more pressure it will place on our health system and on future governments, whose responsibility it will be to find enough money to support the nation’s growing pension bill. But this news is likely to be far easier to swallow for a desk worker than it is for a manual labourer. There are a few impressive exceptions out there, but when the last time you saw a 70-year-old bricklayer?

Incentives for businesses hiring Aussies over 50

A federal scheme to pay businesses a $10,000 incentive bonus to employ workers over age 50 has also been revealed. The package will initially offer businesses $3000 to hire over-50s who have been out of work for six months or more. They will be then eligible for a further $3000 for keeping them employed for 12 months. A further $2000 will be available for those kept in jobs for 18 months and a final $2000 if businesses employ a mature-age worker for two years or more. Not a bad plan, considering the retirement age is lifting.

Paid-parental leave

After much criticism, the PM has decided to reduce the salary cap from $150,000 to $100,000. It’s good to see the government taking parental leave seriously. The timing was certainly interesting, given the rhetoric about sacrifices we all have to make… but he made a promise to the electorate and was somewhat forced into a corner. Ultimately it’s being seen as a good result for the majority of young workers who are, or will be, looking to start a family in the not too distant future.

Moving for work

The Coalition says it will pay as much as $6000 to long-term unemployed people if they move to a regional area for a job, or $3000 if they move to a city. It’s only available to people who have been on Newstart or Youth Allowance longer than a year.

Shrinking government

Finally, if you currently work in the public service, it’s all a bit scary. Tens of thousands of jobs could go in the coming months. 3000 jobs are predicted to be shed from the ATO alone.

While the above changes will affect some people more than others, there’s no doubt this budget was designed to be brutal and will continue to meet plenty of resistance from many in the broader community, as well as in parliament itself. Whether it’s a necessary brutality, or overkill, only time will tell.

What’s your take on it?

 

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