Coalition's plan to abolish welfare supplement attacked by Australia Institute
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Version 0 of 1. A move by the Turnbull government to abolish a welfare supplement on the basis the carbon price has been repealed is out of sync with a decision to leave in place income tax cuts that cost the budget about $8.4bn over the forward estimates, a thinktank has found. The Australia Institute has highlighted the contradiction in a report it has produced as part of arguing the case for keeping the clean energy supplement, which boosts the benefits of people living below the poverty line – a supplement the government has pledged to abolish. As part of its omnibus savings bill the government wants to scrap the supplement for new benefit recipients, on the grounds that the carbon price no longer exists. The move is expected to save the budget $1.4bn. The supplement was introduced as part of the compensation package that accompanied the introduction of the Gillard government’s carbon price, which was repealed by Tony Abbott when he defeated Labor in the 2013 election. But the Australia Institute points out that the changes to income tax rates that also accompanied the implementation of Labor’s Clean Energy Act “will be worth, conservatively, $8.4bn over the forward estimates”. “The government’s justification for these cuts is selective,” said the executive director of the Australia Institute, Ben Oquist. “And to select only those who can least afford to take an income cut runs in sharp contrast to claims that budget repair would be fair.” The Australia Institute points out the move to scrap the supplement breaks a promise made by Abbott before the 2013 election, in which the Coalition pledged to repeal the carbon price but retain all the compensation. On the hunt for savings measures to boost its own bottom line, Labor said during the 2016 election campaign it would support the Coalition’s savings measure – a decision that has triggered a significant backlash from welfare and community groups. Cognisant of the backlash, on the other side of the campaign, the opposition leader, Bill Shorten, the shadow treasurer, Chris Bowen, and the opposition finance spokesman, Jim Chalmers, said initially the party would honour savings proposals it offered up during the election. But Chalmers qualified that statement on Thursday. He told Sky News Labor’s position would be “broadly” consistent with the position it took to the recent election and he emphasised that budget repair needed to be fair. Chalmers added that any savings proposal needed to be consistent with Labor values. The rhetorical shift follows weeks of internal discussion within Labor about the fate of the clean energy supplement, with the opposition families spokeswoman, Jenny Macklin, spearheading a push to reverse Labor’s election position. During a recent shadow cabinet meeting, Anthony Albanese argued forcefully that Labor could not reduce Newstart payments for new recipients, given Newstart was already too low. He has since made that case publicly. The decision taken by the ALP during the election on the energy supplement was not taken by the full shadow ministry. Economic ministers have been working for the past fortnight on a compromise proposal but the shadow ministry is yet to take a final decision. Federal parliament resumes next week and the omnibus savings bill is listed indicatively for Senate debate next week. The Labor caucus is yet to consider the proposal because the government was not in a position to produce the proposed legislation expeditiously during the opening week of the 45th parliament. Recent ReachTel polling indicates a majority of Australians do not support cutting Newstart, with 55% opposition in a sample size of 10,000. Thirty-two per cent of respondents indicated they were supportive of the government’s proposal that would cut Newstart for new recipients by $4.40 a week. |