Housing affordability & health: more insights on #Budget2017
Brendan Rynne, Chief Economist
The Budget housing affordability moves are fairly modest and unlikely to have a major impact. The measures aimed at boosting supply by encouraging the development of new dwellings and better use of existing stock might help the overheated Sydney and Melbourne markets a little.
The First Home Super Saver Scheme will also help new buyers to compete against investors, but overall the Budget is just a first step. More policy initiatives will be needed to tackle this complex problem, with greater co-ordination between all tiers of government and the private sector.
The Underlying Cash Balance (UCB) presented in the Budget is slightly worse, by $1.8bn in aggregate for 2016-18, than was forecast in the government’s last MYEFO statement. But from 2018/19 the UCB is forecast to improve dramatically, with a surplus of $7.4bn by 2020/21.
I consider this forecast path to budget repair to be at the optimistic end of the spectrum of possible outcomes. The underlying economic forecasts contained in the budget do not indicate boom times ahead, and there is current excess capacity within the Australian economy which will take some time to be taken up.
Health, aged care and welfare
Liz Forsyth, National Sector Leader, Health Ageing and Human Services
The government has clearly set out its position with regard to Medicare and the Pharmaceutical Benefits Scheme by establishing the Medicare Guarantee Fund and restoring MBS indexation over time. Although the staging of the increase will not satisfy all stakeholders, it is a clear means of neutralising the perception that Medicare is under threat.
Underpinning the health budget was the government’s establishment of new “health compacts” with five key stakeholders which outline shared principles relating to transparency in decision-making, accountability for reforms and stability and certainty in regard to government investment. These compacts set the foundation for long-term engagement and cooperation with stakeholders – including the AMA and the Pharmacy Guild – to increase the pace of reform across Australia’s health system.
The Aged Care sector continues to be impacted by reform and market pressures. It is vital that appropriate governance, including quality controls, and funding support the needs of older Australians. Unfortunately there was no significant investment in this year’s Budget to support the Aged Care sector.
While there are a range of savings measures in the welfare budget and an attempt at payment simplification, it is unfortunate the government has not taken the opportunity to commence a necessary and more fundamental reform of welfare payment arrangements. It is recognised, however, that the new National Housing and Homelessness agreement and the full future funding of the NDIS provide welcome certainty to those Australians requiring support.