Australian government 2014-2015 budget welfare appropriateness
It is the aspiration of every member of the society to live a good life within standard living conditions. According to Graycar (1994, p. 401), adequate standard living is not enough but also adequate community infrastructure support systems, adequate human interaction and companionship, material possessions. These requirements conglomerate to society welfare and several players among them the government, social organizations, and the society have a role to play in enhancing social welfare. In Australia, the pursuit for welfare has seen the emergence of a welfare state, and the status is affected by demographics, government policy, and the prevailing economic circumstances (Graycar 1994, p. 402). The government has the power to influence the three effects on welfare therefore; this essay will seek to establish the Australian government response to welfare through the 2014-15 budget. This will be achieved through identification of the various welfare-related initiatives in the 2014-2015 budget, detailed discussion of one initiative, and conclusion.
As stated by the treasurer in the budget speech (2014, p. 2), the economic strategy of the budget is to define the role of the government in people lives by creation of a sustainable economy through the adoption of various austerity measures. By targeting people lives, it is an indication that the welfare of the society will be affected by the budget. In addition, people’s welfare is determined by the health of the economy. Nevertheless, the fact that this statement could be for political purposes as to generate appeal to the people is not negated. According to Graycar (1994, p. 405), the government response to community welfare is complicated by federalism politics and issues of public finance which are related to idealism, rights, and shares.
The first strategy by the government budget toward community welfare is the budget repair strategy (Budget 2014, p. 3). The purpose of the budget repair strategy is to prevent the accumulation of debt which turns to be a liability. According to O’Connor et al (2003, p. 21), the welfare of the society does not depend only on the health of the economy, but also the government policies in place to ensure long term economic growth. Due to the global economic crisis of 2008 coupled with excessive and unnecessary spending, the economy of the country has been hit with the result being deficits. If the trend of excessive and unnecessary spending continues, Australia will have a debt of $665 billion in 2023-24 (budget overview 2014, p. 3). Initiating budget repair in the current fiscal year will protect living standards as well as prepare for the ageing population, which according to statistics in increasing annually.
The second budgetary initiative taken by the government with regards to improved welfare is every Australian making contribution (Budget overview 2014, p. 5). Social welfare is a concerted effort of the entire stakeholder among them the government both federal and local, the private sector, families, community members, and welfare interest groups. These strategies includes special measures which include enhance increased revenue to the treasury kitty as well as hostility measures to reduce spending by the government. For example, the budget cuts out corporate welfare programs for industry assistance and stoppage of large number of payments and programs for two to three years; these include eligibility thresholds for transfer payments, thresholds for the Medicare Levy Surcharge and Private Health Insurance Rebate, and Medicare Benefits Schedule fees. Those to be affected by this initiative include businesses, state and local governments, high income earners, families, seniors and individuals. For everyone to make a contribution to the Australian welfare those who have to work should work and a cut made to those seniors who qualify for pension scheme. According to Carney (2007, p. 14), those who can should work even if on part time as these reduce the government burden and helps to generate revenue through tax payable.
The third initiative towards identified from the budget is temporary budget repair levy. This initiative targets the high income earners in the society and the objective is to enhance wealth distribution among the high and low income earners. One of the principals of welfare management is the effective distribution of resources and the wealth generated from these resources (O’Connor et al. 2003, p. 20). According to statistics, the average annual income for a standard lifestyle in Australia is $80,000. For a person earning $180,000 per annum, they are way too high in the ladder as they can afford to lead a lifestyle characterized by excessive opulence. By implanting a tax rate for those above this income bracket is a pro-welfare strategy for enhancing effective distribution of wealth.
Probably the most direct initiative towards welfare in the Australian 2014-15 budget is the response to the changing demographics. Because of the change in Australian population, the number of aged persons between 65 and 84 years will increased with time as to double by 2050. On the other hand, the number of persons within the traditional working age will decline; the result is increased burden to the government to support the elderly in the society. This initiative requires increment in welfare payments among them pension, family payments, unemployment benefits, and childcare support (budget review 2014, p. 8). The government has allocated 35% of the 2014-15 budget for these payments. However, this welfare friendly initiative comes with a hostility measures to check on the spending through pension schemes. These hostility measures include revision of the pension and payments scheme to ensure sustainability.
However, one of the initiatives in the 2014-15 budget is the requirement for patients to help in paying for medical services. Even though this is in line with the initiative of every Australian contributing to the growth of the Australian welfare, it counteracts the tenets of community welfare. Even though the requirements for health care provision are quality and affordable, it would better if medical services are available for the society for free. Moreover, these requirements could be counterproductive for some of the disadvantaged indigenous communities in the country. According to Watson (2005, p. 15), due to the life experiences gap between indigenous and non-indigenous Australians, the implementation of absolute minimum standards is not ideal.
Among the various initiatives in the 2014-15 Australian budget, every Australian making a contribution is probably the one that cuts across all the other initiatives. Given welfare is a responsibility of various groups and individuals in the community; the Australian government has drawn on every player to make a contribution through either giving in giving up.
According to the treasurer of the commonwealth of Australia in the budget speech, contribution by all Australians has major impetus to the growth of welfare. Some of the benefits to be derived through contributions by all Australians include capability to compete with the emerging Asian market, realization of sustainable welfare system capable of supporting the needy and vulnerable of the society, and infrastructure systems (budget speech 2014, p. 3). The appeal for all to contribute is extended to businesses, states and local governments, high income earners, families, seniors and individuals.
The first and highly visible contribution to the Australian welfare in made by the high income earners in the society. The government’s plan is to implement a tax levy for those who earn above $180,000 per year. The rate of this tax levy is 2% of the amount above the $180,000 bracket. Even though the levy is under the budget repair levy initiative, it can well fit under the all Australians contributing initiative. First, to implement this type of levy will need setting in place the right policy guidelines. Second, it is a welfare enhancement initiative that allows for redistribution of wealth among by taxing those above the $180,000 taxable income bracket. The more an individual earns above the bracket, the more levy they pay, hence enhancing fair distribution of wealth.
This tax levy contribution by the high earners affects welfare in different ways; negatively in the short term and positively in the long term. In the absence of the tax levy, it means more amounts to spend for the high earning individuals. With more to spend means better welfare through access to sophisticated services or ability to invest. Therefore, implementation of the tax levy will derive these individuals off the extra amounts to spend hence reduced welfare, even though above the prescribed standard. In the long term – after the three years indicated (budget review 2014, p. 6)- the government will have collected $3.1 billion, which could be used to better the welfare of the disadvantaged.
The appeal by the treasurer in the budget speech for all Australians to contribute involves contribution by giving as well as contribution by giving up. Over the last decade, the government had adopted an ambitions and highly accommodating welfare policy that included programs for various disadvantaged groups in the society as an effort to raise their living standards (Budget review 2014, p. 5). However, these programs are identified as being excessive and unnecessary. As a contribution to the welfare kitty, these programs will be reduced and reshaped to accommodate only these deserving in the society and with adequate standard allowances.
Through the all Australians making contribution initiative, the government will help to improve the welfare standards of the country through alleviation of wasteful spending and allocation of welfare allowances to the most deserving. Though these hostility measures, the government will be create a resource for rebuilding the welfare of Australians through establishment of a sustainable economy, guarantee standards of living, globally competitive markets, and infrastructure.
In conclusion, the Australian government has established various initiatives through the 2014-15 budget with the objective of stabilizing the country’s economy and creating better and sustainable welfare standards. While some of the initiatives have immediate impact on the welfare of the Australian citizen, some will impact the welfare standard in the long term. The various initiatives discussed in the essay are; budget repair which is an initiative to prevent and reduce the soaring debt in the Australian budget, all Australians making contribution which requires business, state and local governments, high income earners, individuals, and families to participate through giving to the government or giving up on some excessive and unnecessary expenditure programs, the temporary budget repair levy that involves those earning above $180,000 per annum taking a tax levy, and the response by the government to the changing population through introduction of adequate aged payments to the deserving. However, the budget has some negative initiatives for example the initiative requiring patients to help in paying for medical services. Nevertheless, the greater percentage of the Australian budget 2014-15 has been identified as to enhance welfare and its growth.
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