“Paying less stamp duty means very little for people who can’t afford to buy new homes when they are already struggling to make ends meet. What they most need is ongoing support to help them get back on their feet during tough times.”
(NCOSS Media Release 8 June, 2010)

This year’s State Budget has followed the example of the Commonwealth Budget from May – despite being the last before an election, the NSW Government was determined to produce a Budget that would be considered fiscally responsible. Treasurer Roozendaal said in the Budget speech: “The beacon of hope I talked about last year has lit the path to prosperity... we will invest in what is important to NSW families – essential frontline services, new infrastructure and jobs – and take NSW forward along a path which is responsible, fully funded and maintains our solid-gold AAA credit rating.”

NCOSS is not opposed to budgets being fiscally responsible provided that they are also fair. NCOSS is also not opposed to measures to build a strong economy provided that the benefits of such growth are shared across all parts of the community. The NCOSS analysis of the Budget reveals that while there are new measures to foster economic growth there is little in the way of new spending initiatives targeting those most in need. 

In analysing the NSW 2010-11 Budget several overall themes were apparent:

• While it is true that in several areas there is “record spending” it is by and large “business as usual”. The funds committed are what was expected as a result of prior announcements or previous forecasts. Where there is new or additional money, while welcome, it is usually insufficient to meet existing demand or catch up with underinvestment in previous years. In other program areas there has in fact been a real cut in expenditure based on the 2009-10 expenditure when you take into account CPI.
• The focus is still very much on “big systems” and/or crisis interventions rather than refocusing on early intervention and prevention by committing a greater proportion of total funds to such programs. NCOSS does not object to the much needed investment in hospitals, and out-of-home-care (OOHC), for example, but is concerned that the same priority and investment is not given to programs that would reduce the growth in demand for such services. While it would be naïve to assume we will never need crisis interventions across a range of social policy areas, we can seek to reduce the rate of growth in demand for such services by investing a greater proportion of our resources in early intervention and prevention. Despite much rhetoric by Government of the need to do this, there is little evidence in this Budget that this is in fact what is happening.
• There is no “whole of program, cross agency” breakdown for significant initiatives such as Keep Them Safe, the Homelessness Action Plan or Two Ways Together. This extends also to the State Plan. Without a clear statement drawing all of the component parts of these action plans together it is very hard to assess progress and investment against the various announcements and commitments made.
• There is still an emphasis on “building” physical assets rather than “building” individual and community wellbeing. Initiatives to bolster the building and construction industry assist the overall economy as well as providing quality homes, public facilities and infrastructure. This is, however, only part of the picture. While a strong economy will improve prosperity overall it is not enough to ensure that this prosperity is fairly shared across the community. We still need investment in services that support those who continue to struggle, despite an improving economic environment.
• Reducing levels of Government debt and reducing levels of Government expenditure through the imposition of “efficiency dividends” (i.e. cost savings) across agencies continues. While supporting the need to ensure expenditure is well targeted and achieves “value for money” NCOSS remains concerned that such blanket approaches can produce unintended consequences that further reduce effectiveness of programs and actually add to the overall costs without any improved outcomes for the people and communities who are intended to benefit.

A feature of the Budget was the NSW Home Builder’s Bonus which will exempt some home purchasers from paying stamp duty on new houses and apartments for two years. Reducing the overall cost of housing is a worthwhile objective but NCOSS is concerned that this particular measure is poorly targeted and will do little to make housing (whether purchased or rented) more affordable for those on lower incomes. While NCOSS has no desire to see developers (and ultimately those who purchase or rent such property) pay more than is necessary for community infrastructure we are also concerned that the capping of local government infrastructure levies is a blunt instrument which could leave some communities worse off in the longer term because of the failure to invest properly in community infrastructure and facilities.

On a more pleasing note, NCOSS has welcomed an increase of $10m for NGOs in the community strengthening stream of CSGP. Together with the previously announced $4.5m for NGOs within the direct services stream, this is a significant and long overdue boost for local community organisations that do such terrific work. The allocation of $11.4m for a Youth Package targeting youth unemployment is also welcome although well short of a comprehensive long term plan to ensure that young people, particularly those who have disengaged from school, get the support they need to get and keep a job in what is a fast changing and competitive labour market.

Overall, the 2010-11 State Budget is one that probably meets the Treasurer’s “fiscally responsible” objective but misses the mark in terms of being fair. Investment in programs and services that will lead to better outcomes and lives for those doing it tough, while welcome is either too little and too late or business as usual. Until we, as a community, prioritise the needs of those who are less well off, and this is reflected in government budgets, there will still be work to do.

A full analysis of the State Budget is contained in this edition of NCOSS News and is also available on the NCOSS website.