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Lawyers respond to 2018 federal budget

There have been mixed reactions from members of the legal profession towards the 2018 federal budget, which was revealed Tuesday night.

user iconMelissa Coade and Jerome Doraisamy 10 May 2018 Politics
Budget, federal budget, money, cash
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The response to Australia’s new federal budget by legal experts and the leaders of various representative organisations in law has been decidedly mixed.

Main features of the LNP government’s final budget before the next federal election, included a tax offset for low and middle income earners for as much as $530 per year; as well as changing the 32.5 per cent tax bracket for the next financial year, increasing the bracket from $87,000 to $90,000.

The national revenue forecast showed a significant increase in money flowing to the government, however according to expert business observer Jenni Henderson from The Conversation, reaching surplus as soon as possible could be attributed in part to “timing tricks”.

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Total expenses for the 2018-19 federal budget came in at $488.7 billion. The budget deficit for the 2017–18 financial year would be $18.2 billion, Mr Morrison announced on Tuesday night.

Funds for the Attorney-General’s department were cut by $20.3 million over five years, resulting in a loss of almost half a million dollars for the Human Rights Commission. The 2018–19 budget also revealed that the Administrative Appeals Tribunal would get $3.7 million cut from its funding allocation over the next five years.

Failure by the government to provide additional core funding for legal assistance services, core justice system initiatives or bodies was heavily criticised by Amanda Alford from the National Association of Community Legal Centres (NACLC), who said that the Turnbull government had missed an opportunity to fund essential services.

“On the whole, this budget prioritised company tax cuts for big business and personal tax cuts ahead of properly funding essential services, including legal help. This will have a real impact on the hundreds of thousands of people our centres work with every day,” Ms Alford said.

Other key figures of the budget included:

  • $1.2m over four years for the implementation of the Optional Protocol on the Convention Against Torture and Other Cruel, Inhuman, or Degrading Treatment or Punishment; and
  • $1.6m over two years to develop and deliver a national apology to the victims of institutional child sexual abuse.
Legal assistance and the courts

While the Law Council of Australia (LCA) welcomed some announcements relevant to elder abuse, institutional child sex abuse, anti-slavery and the OPCAT protocol, there were other major priorities it said the budget had ignored.

President Morry Bailes said that the justice system remained in a state of crisis. He reiterated the face that some families with matters in the federal courts were waiting up to three years for a final hearing.

“In the last sitting fortnight before the budget, the Senate passed, by an overwhelming majority, a motion calling for urgent action to address the court funding crisis,” Mr Bailes said.

“We look forward to continuing our work with the government, and parliament, to develop a sustainable long-term funding model for the federal courts.”

Those budget commitments that the LCA endorsed included $3.6 million over four years to set up specialised unit for modern slavery reporting

Doug Humphreys OAM, president of the Law Society of NSW, said that main issue with the federal government’s backing of family law was that there was no provision for ongoing recurrent funding.

Last year the Commonwealth committed an extra $80 million funding for frontline family law services, plus $12.7 million to establish parent management hearings and $3.4 million to pilot six new specialist domestic violence units.

“Delays cause undue hardship for families struggling through complex and emotionally charged family litigation,” Mr Humphreys said.

He also advocated for waiting until the Australian Law Reform Commission’s review of the family law system was completed before the rollout of parenting management hearings.

Mr Humphreys went on to press for urgent federal investment in court resources, as well as the appointment of extra judges.  

“The chronic backlog of matters could be better addressed if the funds allocated for parenting management hearings were redirected to the courts,” Mr Humphreys said.

“An urgent allocation of funding to appoint more judges is required in the interim.”

The distinct lack of extra money from the federal government for legal aid services was an express concern for legal leaders. Ms Alford, NACLC’s acting CEO, said that the budget failed to provide funding certainty ahead of the looming expiration of a Commonwealth and state agreement for funding national legal aid services.

“There is no additional core funding for the community legal sector in this budget,” Ms Alford said.

“This budget is a missed opportunity to provide funding certainty ahead of expiration of National Partnership Agreement on Legal Assistance Services in 2020,” she said.

Next year will be the last chance for the Australian government to address what arrangements will provide for legal aid funding once the agreement lapses.

Ms Alford went on to highlight other critical policy areas that were not addressed in the budget, expressing concern about there being no money put towards Closing the Gap Refresh or Aboriginal and Torres Strait Islander community controlled organisations that provided legal services. Her view accords with expert group Reconciliation Australia, which noted that the latest budget measures would have a “modest impact” on areas relevant to improving outcomes for Aboriginal and Torres Strait Islander people.

According to estimates based on findings of the LCA’s Justice Project, an additional $390million per annum was needed to get the legal assistance system back on its feet. This included $200 million as recommended by the Productivity Commission for civil legal assistance alone, Mr Bailes said.

“The preventative, everyday role of timely legal assistance stops simple problems from escalating into more serious matters at great cost to the taxpayer and community. It’s time this was recognised and funded adequately,” he said.

“The Law Council will continue to advocate to end the underfunding of the courts and legal aid that is causing untold damage to the lives of many Australians.” 

Measures to combat elder abuse

The LCA, Law Society of NSW and NACLC all welcomed $22 million over four years for a national plan to prevent the mistreatment of older people.

The federal government’s plan for elder abuse included a three-pronged commitment with the establishment of a knowledge hub for elder abuse, a national prevalence research scoping study and a development of a national plan.

“The Law Society’s Working Group to Combat Elder Abuse has advocated for a multidisciplinary approach to address elder abuse backed by sufficient funding,” Mr Humphreys said.

Mr Humphreys remarked that the prevalence study had the benefit of assessing the magnitude of elder abuse in Australia, in addition to assessing what interventions would be appropriate to stop the physical, psychological or emotional, financial, sexual abuse and neglect of older people.

The Law Society president also indicated that he was critical of what practical effect a national online register for Enduring Powers of Attorney would have in preventing incidents of elder abuse.

“Rather, a national register could create complexities with unforeseen consequences,” Mr Humphreys said.

“Greater investment in health and justice services as well as education, training and research is needed to address this complex problem.”

Ms Alford also applauded a move to establish specialist elder abuse units in partnership with legal service and health justice providers.

“Community legal centres are at the frontline of responses to elder abuse and we look forward to discussing with the government ways we can assist people through delivery of legal services and development of the National Plan,” she said.

Family and domestic violence services

A budget allocation of $54.4 million for services to assist women facing domestic violence, including the national counselling information and referral service and training for community and frontline workers was welcomed by Mr Humphreys. But he did urge the government to back this commitment with more money.   

“More investment is critical as there are many women who are not being identified as being at serious risk of harm,” Mr Humphreys said.

“As a result of this, many women also do not have access to adequate support including victims’ safety services.”

As part of a broader allocation of funding to protect women online, Mr Humphreys also suggested the introduction of a new civil penalty regime to address revenge porn. He said that this would complement the existing online complaints portal and Commonwealth, state and territory criminal offences.

Meanwhile, the NACLC said that it was surprised “very limited funding” had been allocated for family and domestic services, despite the government’s stated commitment to addressing family violence.

A collection of groups advocating for women’s rights, including the NACLC, expressed its bitter disappointment towards just $18.2 million for domestic violence focused services.

Domestic Violence NSW CEO Moo Baulch said the money was only a fraction of what was needed to ensure survivors received basic support.

“The funding is a fraction of what’s needed to ensure that every woman who needs crisis support, a safe and affordable place to live, or community legal support to get ongoing protection and navigate lengthy court processes, can access specialist services that are safe and understand their needs,” Ms Baulch said. 

“Tonight’s announcement also does nothing to address the number of men perpetrating family violence.”

Taxation

Personal income tax cuts were the centerpiece of the budget, with targeted offsets for about 10 million Australians to the tune of $530 a year (or $10 a week), which aim to address “bracket creep” by adjusting the thresholds at which higher tax rates kick in.

For businesses, there is a one-year extension of instant asset write-offs for assets worth less than $20,000 and — subject to approval by the Senate crossbench — delivery of the reduction in the company tax rate as per previously announced policies.

But these measures, Johnson Winter & Slattery wrote, was balanced by a number of revenue-raising measures including “better targeting” the research and development tax incentive (restricting availability to save $2.4 billion over four years), strengthening thin capitalisation rules applicable to multinational enterprises, a crackdown on the “black economy”, and exploration of further options for the taxation of the digital economy.

JWS’ post-game analysis — penned by Reynah Tang, Stewart Grieve, Kathryn Bertram, Julian Wan and Katherine Gough — questioned what is next on the horizon.

With the latest possible date for the next federal election just over a year away, and the increasing prospect the government will want to serve its full term, the firm noted there were questioned to be answered regarding tax reform moving forward.

“While a reduction in the corporate tax rate may be government policy, with every day of the banking royal commission that passes — generating fresh revalations of corporate excess – the prospect of the Senate agreeing to such reform recedes further,” the writers said.

“As such, at this stage, it appears a remote and ever-diminishing prospect that parliament will agree to a cut in the corporate tax rate before the next federal election.”

In addition, the JWS team wrote, with a substantial number of tax and related bills still before parliament, significant effort will be required on the government’s part to have these and the budget tax measures enacted.

“With that context in mind, the prospect of any substantive or meaningful tax reform being prosecuted ahead of the next federal election appears remote,” they said.

“However, for those multinationals in the digital economy, there are some danger signs on the horizon, with the treasurer indicating the impending release of a discussion paper on options for further reform.”

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