JIM CHALMERS MP
MEMBER FOR RANKIN
A BUDGET THAT LEAVES TOO MANY BEHIND
ADDRESS TO THE AUSTRALIAN COUNCIL OF SOCIAL SERVICES
TUESDAY, 18 MAY 2021
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Thanks, Cassandra Goldie, for the opportunity to join you all from the traditional lands of the Yugumbir and Jaggera people.
After the bushfires that brought so much devastation the summer before last, some of the worst-affected families felt like they were forgotten when the cameras left.
Now, as memories fade of the worst of last year’s recession, too many Australians face a similar fate.
Too many are at risk of being left behind.
Too many sacrificed to the Government’s smug self-satisfaction.
Bushfires and poverty are not the same.
But both are disastrous.
Both rob communities of what they value most.
And the Prime Minister’s taken responsibility for neither.
Doesn’t hold a hose.
Doesn’t have a heart.
We saw that in last week’s Budget.
In aggregate, the economy is recovering and that’s a good thing, but we want more Australians to get a slice of the action.
For two million Australians who can’t find a job or enough work, or those caught in long term unemployment at twenty-year highs, it still feels like a recession.
Besides, it’s not a recovery if we just go back to the type of inequality and immobility which has characterised the Liberals’ eight long years in office.
It’s not a recovery if aspiration is only afforded to those already halfway up the ladder. If real wages go backwards. Or if disadvantage is left to concentrate in communities and cascade through the generations.
We can be more ambitious for the disadvantaged than to just hope for things to go back to how they were before COVID-19.
Too many were struggling before; and too many still are now.
Even in a Budget characterised by $100 billion in new spending and marked by $1 trillion in debt, Australians doing it toughest were barely an afterthought.
You can expect a different approach to poverty and disadvantage from Labor.
We won’t just pretend it away; we will act with purpose to alleviate it.
We will take responsibility.
You expect that already from Linda Burney and from a core economic team comprising people like Katy Gallagher, Stephen Jones, Andrew Leigh and Matt Thistlethwaite – and from a leader who grew up in social housing with a single parent.
You can expect it from me, too.
As Treasurer you can expect me to take a deep interest, and for my Treasury to be heavily involved, working hand in hand with Linda’s department to make a tangible difference.
What concerns us all is that despite growth in aggregate prosperity over the last generation, globalisation and technology-led disruption threaten a further polarising of opportunity in Australia.
This polarisation has many characteristics, one of the most obvious being geographic concentrations of advantage and disadvantage.
Those places connected into industries that are benefitting from global knowledge and technology led growth are going forward. Those that aren’t are falling behind.
We have seen this across advanced economies. Analysis from the IMF suggests these disparities have been rising across advanced economies since the late 1980s, feeding and fuelling political discontent.
In general, inner suburbs are going relatively well.
But it’s a much more mixed picture in outer suburban and regional areas, with huge variation in local economies, social conditions and life opportunities.
According to Tony Vinson, just 3 per cent of Australian communities bear the bulk of our society’s burden of disadvantage.
I know what this concentrated disadvantage looks like, I grew up amongst it in the electorate I represent today.
In my home state of Queensland, half of the least-advantaged people live in just four places: Moreton Bay, Bundaberg, Ipswich, and my home town – Logan City.
In fact, around ten per cent of the least well-off Queenslanders live within three kilometres from this electorate office, and almost the same amount again in the next adjoining suburbs.
You all have your own experiences of concentrated, cascading disadvantage to draw on.
I want to pay tribute to your work.
You wouldn’t be here if you didn’t already know the ‘what’ and the ‘why’ this matters.
Today from a Labor perspective I want to give you a sense of some principles behind the ‘how’.
First, I want to acknowledge that income support is a really crucial part of the story.
Having spent most of the past two years campaigning to raise the rate I know how important it is that JobSeeker is adequate.
We all saw the benefits it brought people and their communities when the supplement was introduced.
Not all of you agree with our position on JobSeeker, I acknowledge that too. Cass and her team have kept the pressure on. We want to work with you on it, not against you.
But as important as income support is, it’s not the full story.
It’s not the only lever.
Whether you call it the ‘architecture of opportunity’ as others have, or the scaffolding around social mobility as I do, there are a number of other ways we can tackle disadvantage.
Let me touch on three priorities in particular.
The first is housing.
After eight long years of this Government, housing affordability has gotten worse and there are more homeless Australians than ever before.
Last week, Anthony Albanese announced our plan to create a $10 billion Housing Australia Future Fund.
Over the first five years it will build around 30,000 social and affordable homes
It will also:
- improve housing in remote Indigenous communities;
- invest in crisis and transitional housing for women and children fleeing domestic and family violence, and older women on low incomes who are at risk of homelessness; and
- build housing and fund specialist services for veterans who are experiencing homelessness or at-risk of homelessness.
A second priority is dealing with concentrated disadvantage.
In recent years, because of the success of programs like Logan Together and others associated with the Australia Together Alliance, I’ve become a big believer in place-based initiatives.
In these places, local, targeted and differentiated strategies are needed. They can only be delivered through the kind of localised planning, decision making and investment that goes with a place-based approach.
Place approaches are a re-imagining of the role of government and an opportunity to re-invigorate the relationship and trust between governments and the communities they serve.
Because disadvantage has become so concentrated, a place strategy that supported 10 communities in each state and territory could benefit over 50 percent of all Australians facing adversity.
We could likely do this without more spending.
According to the Australian Institute of Health and Welfare the welfare services spend is around $50 billion when you combine the Commonwealth and the states.
In target communities, case studies have estimated this spend per person is something like $42,000.
In Logan, 100 separate investments in children and families have been tracked, with hardly any system-level coordination.
Despite all this ad hoc spending, things haven’t got better.
Tony Vinson studied locational disadvantage for over 40 years. The list of suburbs he studied in the 1970s is almost the same list as his last report in 2015.
Glyn Davis’ book “On Life’s Lottery” highlighted the startling statistic that people born into poverty in Australia are five times more likely to suffer adult poverty.
Progress against some of the Closing the Gap targets is glacial.
Child wellbeing data for Queensland shows kids in high SES communities are improving, while kids in low SES communities are going the other way.
I’m proud to say Logan is holding back this tide, but there is still so much work to be done.
Place-based strategies offer hope here.
Recent studies, inquiries and reports, including important work by the Productivity Commission, have identified place-based solutions as an opportunity to change outcomes and get better bang for buck in social spending.
Existing Commonwealth place-initiatives are making a good start, but they need stronger leadership to move from the fringes to the centre of bureaucratic endeavour.
What could we do differently?
I’m conscious that these are programs in the department Linda Burney shadows.
In our conversations with each other, and with leaders associated with the Australia Together Alliance and other collaborations, some possible steps have emerged.
We could consolidate existing place-based approaches into a national framework and move them to the centre of social policy.
We could involve the Treasury more substantially and use National Cabinet to drive it across jurisdictions.
Within this framework, local place-based community initiatives could be resourced.
Those that work could be scaled up and replicated in other high-risk communities we identify.
We could strike a better balance between interest from Canberra and devolved local decision making, investment coordination and service redesign.
Data sharing would be an important feature.
As would professional development within the public sector.
Local community leadership, cultural governance (especially for First Nations communities) and shared decision making across government, community and NGOs would be essential features.
Civil society organisations would need to be involved – and they’d have to prioritise community outcomes over organisational expansion.
Perhaps we could have Community Deals, each with a mandate to drive place-based strategies in the most disadvantaged communities over a long period.
The Deals could be co-governed by government, civil society and community leaders.
They could potentially combine funding and data from across the Commonwealth and participating state and territory agencies for local decision making.
Make policy and reform recommendations to central government agencies.
Coordinate employment, economic development, housing and child and family policy and investment to ensure local initiatives were appropriately supported in those domains.
And stay close to local initiatives and bust barriers and make things happen so that delivery on the ground worked.
At its best, government leadership with a place-based approach can catalyse socially minded private capital too.
The third opportunity here is impact investing.
Impact investors around the world have seen the importance of a place-based approach for revitalising economic development.
In mature financial markets like the US and UK, impact investors have provided patient capital and support for social sector organisations to finance housing, community education facilities, health centres and clean energy projects in disadvantaged communities.
This is also happening closer to home, and we need to work more closely with our impact investing community to leverage their resources and insights.
Take the example of a local Queensland social enterprise called Vanguard Laundry Services. It’s a commercial laundry creating employment opportunities for people previously excluded from the workforce, predominantly due to mental health conditions.
It’s a program deeply embedded in the local community in Toowoomba.
Many of the workers were unemployed before starting work there and the program has been able to achieve a much higher staff retention rate, compared with many other Employment Services programs.
These three ideas I’ve touched on are united by our recognition that disadvantage is greater than the sum of its component parts, so the solutions must be too.
We’ll need to be collaborative.
Labor will have a very different relationship with the community sector – because we value your work, advice and advocacy. We will work with local organisations and we will value co‑operation over competition.
Because as we emerge from the recession we should seize the opportunity to make the economy and our society stronger, more inclusive and more sustainable after COVID-19 than it was before.
We need to make sure that more Australians can get ahead in the recovery and aren't left behind.
This Prime Minister, this Treasurer, and this Government are unwilling or unable to understand that.
That’s why the Budget was a missed opportunity, and an expensive one at that.