Federal Budget 2020: 10 things that will define this budget in SA

From rebooting the economy to fixing an aged care system exposed as appallingly ill-equipped to do its job, today’s Federal Budget will need to focus on more than just building.

A spending blitz to repair Austtralia’s battered job market may be the government’s biggest ticket pledge in a budget defined by cascading disasters, but it will take more than that to fix the problems exposed in 2020. Michael McGuire explores 10 areas of Tuesday’s Federal Budget that will define the document for South Australians.

  INFRASTRUCTURE  

Prime Minister Scott Morrison and Treasurer Josh Frydenberg’s attention will be called to more than just jobs. Picture: Adam Taylor

A repeated mantra through the COVID crisis has been the need to find “shovel-ready’’ projects that can have money poured into them quickly to provide instant jobs. The Federal Government and the Reserve Bank have urged the states to do more in this area and the Marshall government has been criticised by some for not moving quicker to find and fund infrastructure projects. Federal Treasurer Josh Frydenberg will extend the government’s 10-year, $100 billion infrastructure plan and SA could receive a healthy slice of that new money, which could be directed towards roads, schools and hospitals, and generate much-needed employment. The long-urged sealing of the Strzelecki Track in the north could become reality after images of flood damage emerged last week.

  NORTH-SOUTH CORRIDOR   

The completion of the state’s biggest infrastructure project has been in limbo as the Marshall Liberal Government decides on whether to pursue the ultra-expensive tunnel option, which some estimate could cost $11 billion, or complete the road entirely above ground. At stake is the future of the 10.5km stretch of South Road from the River Torrens, near Thebarton, to Darlington. Tunnels would spare hundreds of properties along South Road, potentially including the historic Thebarton Theatre, from demolition. The State Government had said it would make a decision by the middle of this year but there is still no clarity on when a resolution will be reached. The Federal Government has previously promised about $2.5 billion to help, but none of that has been included in forward estimates.

 TAX CUTS  

Treasurer Josh Frydenberg has signalled he will bring forward the government’s already legislated tax cuts that were due in 2022. It has also been speculated that the tax cuts will be backdated to July 1, so Australians will get immediate relief and not have to wait until July next year. The personal income tax cuts are worth up to $2565-a-year for workers earning more than $120,000 and $1080 a year for anyone earning more than $50,000. There has also been speculation further tax cuts that are scheduled for 2024 will be brought forward as well.

People are seen queuing outside the Centrelink office at Norwood shortly after the pandemic hit in March. Picture: AAP Image/Kelly Barnes

  JOBKEEPER  

The initial $1500 a fortnight payment was brought in at the height of the COVID epidemic to help employers suffering financial distress to maintain and keep paying their employees. The government sends the money to the employer who passes it on their employee, The subsidy has been paid to 960,000 employers who employ 3.5 million workers around the country. It fell to $1200 last month and will fall again next year before it expires in March. What the government does with the payment after that is of great interest to many as it has been regarded as a vital tool in helping the economy avoid oblivion and keeping people employed. It is estimated Jobkeeper injected $3.1 billion into the SA economy.

  JOBSEEKER  

This payment was brought in to help those who lost their jobs in the pandemic. It was a rebadged and rebooted version of the old New Start allowance. The government instituted a $550 a fortnight coronavirus supplement, which doubled Jobseeker to around $1100 a fortnight. Last month, that supplement was cut to $250 a fortnight. That rate is forecast to continue to the end of the year. Many welfare groups have called for a permanent increase to Jobseeker, arguing the base rate is not enough to live on, and will be hoping to see that tomorrow.

  ENERGY  

The Marshall Liberal Government came to office promising an electricity interconnector to New South Wales to bolster the stability of the state’s power grid. Last month, Prime Minister Scott Morrison backed the plan and said it would be fast-tracked and would help put downward pressure on electricity prices. Mr Morrison had pledged $250 million for a variety of energy projects. However, it is estimated the connector from SA to NSW alone could cost as much as $1 billion, so more funding will be required.

The famed Strzelecki Track, just north of Lyndhurst, after heavy rain last month. Picture: Transport Department.

  TOURISM  

This has been one of the hardest-hit sectors across the country. With no visitors arriving from overseas and travel within Australia, and even for some time within South Australia, severely curtailed, tourist-linked businesses have been bleeding. The Coalition announced a $1 billion relief and recovery fund in March and has targeted tourism areas through grants for regions and tourism infrastructure. Tourism operators will be keenly awaiting further and more detailed support. More funding has also been promised to help struggling airlines such as Qantas and Virgin, as well as regional operators such as Rex.

HEALTH

While the focus will be on the economic impact of the pandemic, first and foremost COVID is a global health emergency. In the early days of COVID there were legitimate concerns based on overseas experience that the nation’s health system could be overwhelmed. Hospitals were stretched but good management prevented a crisis. More money will be needed to prepare the health system, across all levels, for any future crisis. More funding for medical research and development could also be a key.

AGED CARE 

COVID has exposed many serious failings within the aged care system. The Federal Government contributes around $20 billion a year to the sector but COVID has revealed wide gaps in how people are treated within the system. More than 250 people in nursing homes and other care facilities have died from COVID. The Aged Care Royal Commission was scathing of the government’s failure to have a detailed, overarching plan for how the sector should deal with COVID.

   JOBS  

Treasurer Josh Frydenberg has said “this budget is all about jobs, it’s all about rebuilding the economy from the shock, and it’s all about securing the future’’. The government has already announced that it will pay half the salary for new apprentices and trainees in any industry for a year. “If young people are out of the workforce for a long period of time, it can be really hard to get back,” Mr Frydenberg has also said. The unemployment rate fell last month, but could shoot up again.