MYEFO must end ‘zombie’ budget strategy which rips $7B from the poorest

15 December 2016

ACOSS today urged the Federal Government to halt relentless attacks on people on low incomes, and use next week’s Mid-Year Economic and Fiscal Outlook (MYEFO) to chart a fair and realistic Budget reform path and abandon $7 billion of harsh ‘zombie’ social security cuts that have already been rejected by Parliament.

“Low-income families, people struggling to find a job, and anyone who relies on social security payments to survive, need certainty in the Budget as much as business and the ratings agencies do. It is unacceptable for Government to continue its attacks on low income people, holding over their heads the threat of large cuts to their incomes, as it has since May 2014,” said ACOSS CEO Dr Cassandra Goldie.

“Labor, the Greens and crossbench Senators, including the Nick Xenophon Team have unequivocally ruled out the harshest budget cuts, including the cruel proposal to impose a five-week wait for young people to receive unemployment benefits, the abolition of the $6 a week Energy Supplement for families on the lowest incomes, and severe cuts to family payments which would reduce the income of a single parent with two teenage children by $60 a week.

“In just the last week, we have seen a host of media stories – some involving Cabinet Ministers and a former Prime Minister – blaming unemployment on ‘bludging’, and trivialising serious disabilities including depression and back pain.

“Proposals to impose more penalties on unemployed people, who already have to search for up to 20 jobs a month and attend regular interviews with Centrelink and Jobactive providers and participate in Work for the Dole, show a lack of understanding of how tough the job market – and Centrelink rules – are for people already.

“People on low incomes and unemployed should not be treated as easy targets. Our budget challenges are not because of a so-called ‘welfare blowout’. Social security for people who are unemployed accounts for less than 3% of the Budget and its share is projected to decline in future years. Last year, there were just 29 prosecutions for serious social security fraud.”

“The Government cannot legitimately keep booking savings year after year when they are unlikely to pass. It’s time to rule a line under the failed 2014 Budget strategy.

“Real budget reform should review and redesign the spending programs and tax breaks that are growing the fastest or lack a clear justification. The government has made a start with superannuation. It should thoroughly review tax breaks such as those for capital gains, major gas projects, and self-education expenses. It should re-examine whether the health insurance rebate actually reduces the costs of hospital treatment.

“Budget reform worthy of the name requires broad community engagement and support. Governments must bring stakeholders and the community with them by explaining the problem and seeking our views on solutions, rather than keeping us in the dark and then ‘springing’ budget cuts on us as in 2014.

“The Government must accept that Parliament and the community has rejected the failed 2014 Budget strategy. With MYEFO, the Government should end the budget uncertainty and begin to work with the community to forge a new budget strategy that’s fair, acceptable, and realistic,” Dr Goldie said.


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