Budget divides the nation, young and old, rich and poor: ACOSS

13 May 2014

The Australian Council of Social Service tonight said it was deeply concerned that those in our nation who carry the greatest burden from spending cuts in the Budget are those who can least afford it.

“The Budget divides rather than mends. It entrenches divisions between those with decent incomes, housing and health care and those without them. It undermines the fabric of our social safety net with severe cuts to health, disability support, income support, community services and housing programs,” said ACOSS CEO Dr Cassandra Goldie.

“A few measures are in the right direction, targeting those for whom the age of entitlement should be coming to an end: Abolishing the Seniors Supplement, Capping Family Tax benefit part B at $100 000, introducing a levy for people earning over $180,000, and taking super payments into account in assessing eligibility for the Senior’s Health Card. Corporate welfare is also shaved. However, most of these measures will inflict little damage or will only be felt for a short time.

“The real pain of this budget – crushing and permanent – will be felt by people on low incomes, young people, single parents, those with illness or disability, and those struggling to keep a roof over their heads. These are the groups doing the heavy lifting’ for the Budget repair job.

“One of the most disturbing targets of this budget are our young people. The new rules will deny income support to young people up to 29 years, for six months of every year, unless exempted, and then force them into work for the dole. It will deny them Newstart Allowance until 24 (a loss of $48 per week), and move more young people on DSP to Newstart or Youth Allowance, a cut of at least $166 per week. We are excited about the investment for older workers who lose their jobs, but why treat the young and the old so differently?

“Poorer families will also be worse off as a result of the freezing of family payments for 2 years, the $7 co-payments for doctor’s visits and other services, the fuel excise, and the increasing costs of PBS medicines. And no investment in lifting the abysmally low unemployment benefit (Newstart Allowance) for the individuals and families living the most meagre lives, in an otherwise wealthy country.

“For people on low incomes, housing is the biggest cost of living problem. Yet, this Budget offers no guarantee of future funding for homelessness services, and cuts funding to the NRAS, the one bright light for creating new affordable housing.

“To then cut funding for community services, including financial counselling and emergency relief – small amounts in big budget terms – just seems a cruel blow.

“We were told on election night that the new government would not leave anyone behind, now we find its first Budget places the most vulnerable directly in the firing line,” Dr Goldie said.

“The Government managed to find room in the budget to deliver a $4 billion tax cut for business, and major investments in infrastructure and defence.

“For a decent society, we need a budget that brings us together, rather than pulls us apart,” Dr Goldie said.

Media Contact: Fernando de Freitas 0419 626 155

ACOSS CEO Budget Response: 9.30pm tonight, Press Gallery boxes
ACOSS CEO Dr Cassandra Goldie will outline the peak community sector body’s response to the Federal Budget tonight at 9.30pm at the Press Gallery Boxes, Parliament House, Canberra.

Further comments
Social security

“The safety net is being pulled out from under young people in this Budget. Unemployment is twice as high for young people yet school leavers who struggle to find a job could be deprived of income support for 6 months of every year. It is not realistic to expect parents on low incomes to support their young people until they reach 29, and many young people out of paid work don’t have parental support. Removing the Youth Connections program that provides career counselling and support to early school leavers will only make matters worse.

“Most people with disabilities on the DSP payment want a job but employers are often reluctant to take them on, especially people with mental illness. Shifting people to the lower Newstart Allowance will leave them $166 a week worse off without getting them a job.

“The age pension is a vital safety net for older people. Indexing it to the CPI instead of wage movements would reduce it by around $80 a week in a decade’s time. We oppose increasing the pension age any further until Newstart Allowance is increased. Without doing so will only leave more people on the lowest incomes worse off.

Health and education
“The Medicare co-payment and cuts in schools funding move us closer towards a two tier system in health care and education – where those who can pay get first class service and those who can’t afford it are relegated to second class.

“People on low incomes can’t afford GP visits unless they are bulk billed. Already many people have to choose between feeding their families and buying the medicines they need. The health system can’t afford to leave people to get sicker.

“The effective cessation of the NRAS scheme for investors in low cost housing will make it even harder for people on low incomes to keep a roof over their head.

Debt levy
“The proposed debt levy is a much fairer way to pay for essential services such as health care and the NDIS as the population ages than the harsh ‘user pays’ approach. However, the proposed levy lacks a clear purpose, it is introduced when it’s least needed and withdrawn just when it’s needed most – in 2017, exactly when more revenue is needed for essential programs like the National Disability Insurance Scheme.

“The public supported a levy to help finance NDIS and has long supported a levy to help pay for health care. Any new levy should build on these firmer foundations.

“The levy would return to government a fraction of the massive tax cuts given to high earners over the 2000s which were clearly unaffordable both then and now.