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Robin Hood comes good, except for single parent families

8 May 2012

The Australian Council of Social Service has welcomed the overall approach in the Federal Budget, which makes the tax system fairer and will improve the lives of people on low incomes - except for 100,000 of our poorest families.

"This Budget reduces supports and tax breaks for those that need them least, and strengthens them for those that need them the most, except for the poorest sole parents, who are left up to $60 a week worse off," said ACOSS CEO Dr Cassandra Goldie.

"We are delighted that a number of our recommendations to make the Budget more equitable and sustainable have finally been taken up, such as rolling back superannuation tax concessions for high earners; tightening the living away from home allowance; targeting tax breaks for golden handshakes; and phasing out the inefficient mature age worker tax offset. It begins important work on tax reform, which must now be extended, building consensus along the road.

"As well as achieving a surplus the Budget redirects some of that wasteful spending to begin the work on some of our most pressing social issues, including dental health reform, reductions in carbon emissions, the NDIS, and the adequacy of allowances and family tax payments (including the liquid assets test for people claiming income support).

"We welcome the commitment to work towards a national dental scheme from next year. The $500 million investment (over half of which is new money) will be welcome relief to the 400,000 people on public dental waiting lists.

"ACOSS is also pleased to see funding set aside in this year's budget to launch a national disability insurance scheme a year ahead of schedule. This is long overdue and great news for the great many people in Australia with disability, and their families and carers.

"The new Supplementary Allowance of around $4 per week is welcome though it is no substitute for raising Newstart to a decent liveable level and indexed to wages like Pensions instead of CPI but it is the first real increase in the Newstart Allowance payment for twenty years. Further increases to these Allowance payments are essential to reduce poverty and put people in a better position to find paid work. We take it as a sign of good faith that recognises this payment is inadequate, with a much more substantial increase to be achieved around the corner.

"However, it is disappointing that the Budget does not strengthen investment in employment services for long term unemployed people, who still only get an interview every two months and $500 worth of other help. The Budget cuts to Job Services Australia are unsustainable and underscore the need for a major review of the system.

"The Schoolkids bonus is a vast improvement on the Education Tax Refund, which we have called to be abolished. This bonus will make it easier for low income families to claim but could still be better targeted to those families who really need it. The separate family payment increases of up to $600 a year are better targeted and very welcome.

"The major blight on this year's Budget is the unnecessary attack on 100,000 single parents who'll be left worse off. The surplus could have been achieved without leaving some of the most disadvantaged families and their children in deficit.

"People on Parenting Payments will be left around $60 a week poorer by being forced off their current payment ($324 a week) onto the lower paying Newstart Allowance ($265 per week) when their youngest child turns eight.

"This measure goes against the grain of an otherwise balanced and fair Budget and we urge the Government to reconsider. This will drive many more families into poverty and ACOSS will be calling on parliamentarians to reject any legislation to bring this into affect.

"This is not a work incentive measure - in fact the financial returns from employment are less than those available under Parenting Payment.

"Such a proposal further underscores the urgent need for an increase to the Newstart Allowance which has widespread support in the community, among union groups, and business.

"Overall this budget begins the work we need: securing a more sustainable revenue base, whilst funding important national priorities. We must make sure that the 100,000 sole parents are not collateral damage along the way," Dr Goldie said.

For Media Comment: Fernando de Freitas 0419 626 155