Wednesday, May 14, 2014

Federal budget 2014: ABC, SBS cut by $43.5 million

Prime Minister Tony Abbott has broken his election promise: "No cuts to the ABC or SBS."

But the  government's budget cuts to the national broadcasters – combined savings of $43.5 million over four years – are gentler than those expected by ABC and SBS management.

As recently as a month ago, the  government was considering applying efficiency dividends to the broadcasters, which would have cut $204 million from the ABC and $46 million from SBS over the next four years, a government source said. Instead, the ABC will lose about $35 million and  SBS about $8 million.

However, the budget documents contain an ominous phrase that  will leave ABC managing director Mark Scott and the GetUp! activists protesting outside Parliament House on Tuesday bracing for deeper cuts in years to come. The budget papers describe the initial cuts as a "down payment" on the ABC and SBS efficiency study – a continuing exercise to find ways to run the two broadcasters at lower costs.

It is understood  Communications Minister Malcolm Turnbull will demand harsher cuts over coming years but they will be informed by "back office" savings as he has promised not to harm ABC programming.

As expected, the  government will terminate the ABC's $223million contract to run the Australia Network over 10 years. The government will save $196.8million by abolishing the "soft diplomacy" television service, which was designed to promote Australian values in Asia.

The government will cut $3.3million over four years from the  Australian Communications and Media Authority. The ACMA will  also be hit via the 2.5 per cent efficiency dividend – a series of compounding cuts – that applies to most government agencies.

Despite making cuts across government, Mr Abbott has found $10million to "enhance online safety for children". This funding includes $2.4 million to establish a Children's e-Safety Commissioner. The program has been championed by the parliamentary secretary for communications, Paul Fletcher, and Mr Turnbull's name was conspicuously absent from the government's media release on Tuesday.

The government will honour its election commitment and provide $100million over four years to mobile and wireless broadband coverage in regional areas. The government will try to boost the funding of its Mobile Black Spot Program by asking for co-contributions from industry and  state, territory and local governments.

In keeping with the government's philosophy of "smaller government", Mr Turnbull will  abolish the Telecommunications Universal Service Management Agency, and its functions  will be transferred  to the Communications Department.


Federal budget 2014: Young to wait until 25 to get dole

Young people wishing to sign onto the dole will be forced to wait six months before they receive a cent of government money, after which they will have to work for the dole for another six months before either getting a job, or getting cut off again for another six months.

From January 1 next year, all under-30s who want to sign onto the dole (Newstart) or Youth Allowance "Other" (the present, lesser payment for unemployed people up to 22) will be subject to the new system, which will save the budget $1.2 billion over four years and which is aimed at getting the young "earning or learning".

In addition to the six-month waiting period, the eligibility age for Newstart will rise from 22 to 25 years. Newstart is worth about $45 more a week for a single person living apart from their parents than the Young Allowance "Other" payment.

During the mandatory six-month waiting period the young unemployed person will be required to participate in a government-funded "job search and employment services activities". If he or she has previously been employed, the six-month waiting period will be discounted - for every year of previous employment, a month will be taken off the waiting period.

Once the six-month waiting period is over, the unemployed youngster will have to do at least 25 hours a week in Work for the Dole activities for another six months, before either getting a job or going back through the whole cycle again, meaning another six months of no government money whatsoever.

Employers who pick workers off the dole queue will be eligible for a wage subsidy - meaning the young person's dole payment would be re-directed to his or her employer for six months.

In addition to these changes, threshold tests for the dole will remain frozen for three years from July 1, as opposed to rising in line with the CPI. The actual rates of Newstart and Youth Allowance will also be frozen.

Some jobless under-30s will be exempt from the tough new scheme, including those unable to work more than 30 hours a week, carers and parents, part-time apprentices and Disability Employment Service clients.

Young people on the Disability Support Pension also face a crack-down. All DSP recipients under 35 who signed onto their pension between 2008 and 2011 (when tougher eligibility criteria were introduced by the previous Labor government) will be reassessed under the new, tighter system.

People with a "severe or manifest" disability will not have to re-apply, which appears to leave the way open for recipients with a mental illness to be reassessed. Those recipients under 35 who are assessed as being able to work for at least eight hours a week will also be given a "participation plan", meaning they will have to engage in labour market activities of some sort, such as Work for the Dole, work experience or education and training. People who do not comply will be sanctioned, although the budget papers do not specify how.

Disability Support Pension recipients will not be able to leave Australia for more then four weeks and keep collecting their pension overseas. This will save the budget $12.3 million over five years.


Radical shake-up to university funding in budget will see some fees soar

Universities will have unfettered freedom to set their own fees under the most radical shake-up to higher education funding since the introduction of HECS 25 years ago.

While fees in some courses may fall, the cost of a degree from prestigious universities is expected to soar when government caps on course costs are scrapped in 2016. The federal government's contribution to degree costs will decline by an average of 20per cent from 2016 as students take on a greater share of the cost of their education. The changes will not affect current students until 2020.

To calm concerns about the impact on poor students, 20per cent of all additional revenue raised through increased fees will fund scholarships for disadvantaged students.

Nevertheless, heated protests are expected when Education Minister Christopher Pyne travels to campuses across the country to sell the reforms over coming weeks.

The HELP student loans scheme will remain, but in a less generous form. Graduates will repay their debts earlier: once they start earning $50,638, down from $53,345 this financial year.

Interest will be pegged to the government bond rate rather than to inflation. This means graduates will pay an interest rate of up to 6per cent on their student loan – up from 2.9per cent currently. This will affect all students from 2016, regardless of when they started their degree.

The changes to the student loans scheme will save the budget $3.2billion over four years.

In an equally dramatic move, direct government support will be extended for the first time to students at TAFEs, private universities and in diploma programs from 2016. This was the key recommendation of the recent Kemp-Norton review into university funding.  An extra 80,000 students – most in diploma and associate degree courses – will receive government support for higher education from 2018 at a cost of $820million over three years.

Total expenditure on higher education is projected to increase from $8.97billion in 2013-14 to $9.47billion in 2017-18.

"Through these once-in-a-generation reforms, the government will help build a sector that is more diverse, more innovative and more responsive to student needs," Treasurer Joe Hockey said in his budget speech.

"With greater autonomy, universities will be free to compete and improve the quality of the courses they offer."

The government will also spend $439million over five years to provide apprentices with loans of up to $20,000. Apprentices will pay back the loan when they meet the HELP income threshold for university students.

The Australian Research Council will have $74.9million cut from its funding over three years through a one-off 3.25per cent efficiency dividend.

The government is sticking by its pledge to only fund the first four years of the Gonski reforms – despite almost two-thirds of the spending promised by the Gillard government falling in years five and six.

From 2018, the government will fund schools at 2017 levels with extra money added for inflation and increased enrolments. Funding for each state and territory would be determined following a new round of negotiations.

This would mean a total federal government outlay on schools of $18.15billion in 2017-18 – down from the $19.6billion Labor says it would have delivered.

The controversial school chaplaincy program, currently facing a High Court challenge, will be continued for another five years at a cost of $245.3million over five years.

The government will also provide $139.5million over four years to continue the Future Fellowships scheme – which funds mid-career researchers – and $150million in 2015-16 for the

National Collaborative Research Infrastructure Strategy. The university sector had been worried the schemes, which were up for renewal, would not be continued.

Total spending on education is forecast to grow by 3.1per cent in real terms from 2014-15 to 2017-18.


ARENA's axing would mean end of Tony Abbott's support for renewables, says industry

Update:  ARENA has been abolished

The Abbott government appears intent on abandoning all major support for clean energy in Australia if plans to axe the Australian Renewable Energy Agency (ARENA) are confirmed in Tuesday’s budget, senior officials and industry groups said.

 Chairman Greg Bourne warned the government would be “clearing the decks” if ARENA’s remaining unallocated funds of about $1 billion were returned to consolidated revenue, adding to moves to scrap the $10 billion Clean Energy Finance Corporation and its apparent intention to weaken or delay the Renewable Energy Target.

John Grimes, chief executive of the Australian Solar Council, said the industry was “outraged” by ARENA’s likely demise: “There is clearly an ideological agenda on behalf of the government to close down any climate- or renewable energy-related policy or support.”

The council, which spent more than $350,000 in the WA Senate re-election, would now seek to raise triple that to target Coalition members in marginal seats at the next elections, Mr Grimes said.

“People love solar, and more than 80 per cent want to see more solar,” he said. “For us this needs to become a political issue if we’re to turn this ship around.”

Mr Grimes predicted the government’s last substantive policy to support renewable energy – the $500 million, 10-year Million Solar Roofs program – will also be cut in Tuesday's budget. That would make a trifecta of broken pre-election promises, along with support for the RET and ARENA, he said.

Eliminating ARENA and its funding would go beyond the recommendation of the National Commission of Audit, which suggested consolidation into the Department of Industry "to provide opportunities and synergies".

Fairfax Media sought comment from the Abbott government about the proposed cuts.

Mark Diesendorf, a renewables energy expert at the University of NSW, said Australia "would be left behind" by the dismantling of Australia's clean energy industry and many jobs would go.

"There is a concerted attack on renewable energy and a serious attempt to stop its growth dead," Professor Diesendorf said.

"My view is that they cannot stop the growth of solar PV at the residential and commercial levels, but they can stop wind farms and large solar power plants," he said.

Labor and the Greens blasted plans to end ARENA but want to see the details before deciding whether to try to block the move in the Senate.

“If reports the government is scrapping ARENA are true, this is even more evidence Tony Abbott’s opposition to renewable energy knows no bounds,” said Mark Butler, the Opposition’s spokesman on climate change.

"ARENA uses taxpayer dollars to provide certainty to renewable energy projects," Greens leader Christine Milne said. "It would be disastrously counter-productive if this money was funnelled into the farcical Direct Action policy and used to pay polluters instead."

ARENA’s chief executive Ivor Frischknecht rejected criticism the agency duplicated other government programs, as claimed in the Commission of Audit report.

“No other agency supports projects along the commercialisation pathway from basic laboratory research to large-scale pre-commercial activities,” Mr Frischknecht said.

For every dollar invested by ARENA, the private sector was chipping in $1.80. Already some $7.7 billion in 190 projects were in the pipeline.  The agency is considering ventures worth a further $7.7 billion, he said.


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