Submission: Budget Policy Statement 2026
Our analysis of the underlying data suggests that this BPS does not merely maintain the status quo; it creates the conditions for a structural decline in the living standards of low-income families. Our concerns are threefold:
The disconnect between social policy and economic reality. The refusal to adjust abatement thresholds or index supplementary assistance to inflation is creating a "silent cut" to family incomes. Our data show that the real purchasing power of first- and second-tier income supports, such as Accommodation Supplement, Family Tax Credit, and Best Start Tax Credit, is eroding, effectively transferring the cost of inflation onto households least able to afford it.
The engineering of fiscal precarity in public services. The BPS enforces a trade-off between fiscal discipline and the provision of essential services. Our modelling reveals that the current education baselines are insufficient to cover forecast inflation and roll growth. This creates a "fiscal cliff" that will force the commercialisation of costs – specifically in tertiary education – thereby entrenching inequality and increasing student indebtedness.
The Operating Allowance as an instrument of social austerity. The decision to cap new spending at $1 billion is mathematically incompatible with the Government’s statutory child poverty reduction targets. With over 50% of this allowance likely required to maintain 2025 service levels in education by 2027, there is zero fiscal headroom left for the wealth transfers necessary to lift children out of poverty. This BPS signals that the Government is willing to accept a rise in child poverty as the price of its fiscal strategy.
Our oral submission to the Finance and Expenditure Committee at 39 minutes and 12 seconds.
Written submission can be downloaded below.