I have avoided trying to understand the complexities of anything finance related my whole life. I knew taxes existed, I always paid them, I knew they were partly used to subsidise ‘communal’ services and that they went to the Government…but that’s about the extent of my knowledge on tax. Until recently.
I was asked to complete an analysis of the FY14 Commonwealth Budget and boy was I excited! Not really. However, in pushing through this riveting piece of work I discovered that I genuinely found it interesting. I decided to concentrate my analysis on the reform of key welfare initiatives and finished it feeling a lot less mystified and repelled by the notion of tax.
Did you know 35% of our taxes in Australia go toward supporting the welfare of our citizens? New initiatives like the National Disability Insurance scheme which will see a $20.3b investment over 7 years, will sure go a long way to providing much needed support to people with disability. People with disability is a phrase that describes the 460,000 Australians who are less able than most as well as family, friends, carers or organisations that actively support them (Budget 13-14 2013 NDIS Policy). The scheme will see increased supports so that people with disability can exercise more choice and control over their lives and achieve their full potential. This in turn maximises the potential of the support networks of those with disability by broadening the support available to them.
I was recently privileged to hear Sally Richards (Australian disability advocate) speak at the International People with Disability Day. One of Sally’s four sons was born severely intellectually disabled with her husband taking his own life a few years ago, unable to cope with the added pressure while battling mental illness. I was truly moved by Sally’s story and her commitment to ensuring that people with disability are able to make a valid contribution in society. Sally’s amazing courage, determination and sacrifice have led her son to now live in his own townhouse, with a carer, and work part time delivering mail. Sally believes the NDIS is just one more step in fostering better access and inclusion for people with disability, which then has the flow on effect of supporting carers and family members in maximising their potential too.
For Australians not living with disability the increase in Medicare levy from 1.5%-2% of taxable income may not be welcomed, although this is an incremental investment compared to the $20.3 billion forecast to be generated for people with disability as a result of the increase in Medicare levy. We will all be touched by disability at some point in our lives, whether we obtain a disability or know someone who requires assistance. DisabilityCare Australia will also incorporate the National Injury Insurance Scheme (NIIS), ensuring those who are affected by a ‘catastrophic’ injury can receive supports on a no-fault basis with reduced litigation and greater access to care required (Budget 13-14 2013 NDIS Policy).
Policymakers and Treasury aim to strike a balance between the State’s economic priorities and social outcomes through varying the investment allocated to certain initiatives every financial year. The key initiatives across welfare reform demonstrate a focus on research for informed policy making, inflation adjustments and labour force participation incentives to drive increased spending. Effective budget allocation ensures resources are allocated to increase social capital through reducing the costs of anti-social behaviour and driving social cohesion for a fully functioning society which results in a strong economy (Cox 1995).