MYEFO: another fairness failure by the Morrison Government

17 December 2018

ACOSS says the Morrison Government’s Mid-Year Economic and Fiscal Outlook fails to share Australia’s prosperity with those who are living in poverty and, despite welcome investment in aged care, fails to secure essential services into the future.

 “The Budget update is yet another fairness failure from the Morrison Government. Instead of strengthening revenue and plugging the most urgent gaps in the social safety net – like lifting Newstart – it locks in slated social security cuts and legislated tax cuts for the top 20% of earners,” said Dr Cassandra Goldie, ACOSS CEO.

“The Treasurer has today said that a ‘strong economy is the key to delivering better government services’. This is only the case if the benefits of economic growth are not squandered on tax cuts but invested in essential social security payments and community services.

“The Government’s track record on services funding is dismal: more than $15 billion has been cut from essential social security payments and community services in the last 4 years. Despite Australia’s prosperity, people living in poverty are continuing to be left behind by the Morrison Government.

“While the additional investment in aged care services announced today is welcome, it will not make a dent in the enormous backlog of demand, with a waiting list of more than 120,000 for home aged care places.

“Much more is needed to address the future costs of health and aged care, projected to cost more than $20 billion more per year by 2028 (on PBO modelling). We cannot meet these costs while only 16% of those over 64 pay income tax. Reform of the tax system is needed in the next term of government to close excessive tax breaks for retirees to help fund future services.

“We welcome the decision to not proceed with a proposal to require prisoners to reapply for the Disability Support Pension after very short periods in custody.

“However, we are very disappointed to see a further extension of the Cashless Welfare Card trials and income management funded in MYEFO, despite evidence that restricting people’s capacity to control their finances is ineffective, disempowering, stigmatising and expensive.

“We note that while the project surplus is largely due to increased tax receipts, it is also underpinned by reduced social security and family payment expenditure. This includes some truly cruel cuts to social security, including forcing new migrants to wait for up to 2 years to receive government assistance to raise their children and take parental leave.

“We are also disappointed to see that a number of other slated cuts and punitive social security policies have remained on the books, including cutting the pensioner education supplement and education entry payment and introducing drug testing for payment recipients.”