The Australian Council of Social Service is calling on the Federal Government to put people and the community ahead of vested interest groups and make tackling poverty a priority in its economic statement due in the coming days.

“While the budget situation is clearly challenging for the Government, with over $60 billion in annual revenues lost since the GFC, budgets are always about priorities and choices,” said ACOSS CEO Dr Cassandra Goldie.

“The Government has chosen, against most economic advice, to set a fixed target to restore the budget to surplus in 2016-17. ACOSS continues to support a progressive return to surplus but the timing should depend on economic conditions. We agree on the vital importance of getting the Budget on a sustainable footing in order to fund the crucial social infrastructure we all want, however this must not be done at any cost.

“We cannot see cuts to vital programs or inaction on dealing with our national housing affordability crisis and growing rate of poverty. Similarly we cannot backtrack from much needed investments in education, health and disability support services.

“The Government has taken commendable action this year to curb poorly targeted and wasteful programs, including by removing tax subsidies for private use of company cars and capping the tax deduction for self-education expenses. It should hold the line on these decisions in the face of vigorous opposition from well-resourced campaigns.

“However, it is difficult to justify a tax subsidy of $14 billion for superannuation contributions made by employers, when around half of this goes to the top 20% of taxpayers. The Government’s announcement of a five year freeze on further reform in this area is a retreat in the face of vested interests and does not augur well for the future of tax reform in Australia. Low and middle income earners are poorly served by a superannuation system that delivers too much tax support to people on higher incomes and too little to those who need it most.

“The Government should hold its course in curbing wasteful spending and tax breaks, and growing a sustainable revenue bad, in order to address the growing rate of poverty in Australia, including amongst our children.

“The reality is that despite two decades of unprecedented growth our country faces growing inequality. One in eight people are currently living in poverty, including one in six children. This is simply unacceptable.

“The Government faces a choice this week – whether to give priority to the poorest – including those languishing on payments like the $35 a day Newstart Allowance – and those who benefit from poorly targeted and wasteful programs and tax breaks.

“Newstart Allowance is still unfinished business for the Rudd and Gillard Governments. When the first Rudd Government increased pensions by $32 a week, unemployed people, students and sole parents were excluded. Rather than increase the lowest social security payments, the Gillard Government shifted another 100,000 sole parent families onto the lower Newstart payment.

“Unemployment is rising and around 110,000 more people have gone onto Newstart Allowance over the past year. Two thirds have had to rely on income support for more than a year. It is no longer just a short term payment.

“We need to see a $50 increase in the single rate of Allowance payments as an urgent priority if we are to stem the tide of worsening poverty in our nation. ACOSS has costed this modest increase at around $1.6 billion a year once fully implemented. This can be paid for by closing off wasteful and poorly targeted programs,” Dr Goldie said.

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