Family payments need ‘overhaul’ but not by failing those most in need

The Australian Council of Social Service has strongly opposed the federal Government decision not to go ahead with a family benefits increase that was specifically targeted at struggling families who need it most. 

“We understand the current pressures on the Budget but quite frankly there are other more important areas where savings can be found rather than going back on a promise that would greatly assist around a million of our nation’s lowest earning families,” said ACOSS CEO Dr Cassandra Goldie.

“The family payment system is the bulwark against child poverty in Australia, which is growing despite two decades of unprecedented growth. We know that 2.2 million people are currently living in poverty, including some 575,000 children. If it wasn’t for our family payments system the situation would undoubtedly be much worse.

“It is important to note that the adequacy of family payments has fallen behind due to loss of full indexation since 2009 and we believe the measure to provide low income families around $600 extra a year would go some way to improving that.

“Of course, we agree that the current fiscal environment requires us to question our tax and transfer payments. We do need to explore where assistance from government needs to be universal and when it needs to be better targeted.<

“That’s why we had recommended that the government focus on better targeting the family payment system, especially Family Tax Benefits B so we can get that assistance to families that really do need it.

“In our Budget submission we’ve argued for an urgent restructure of family payments, which would see the money from things like the Baby Bonus and the Schoolkids Bonus go back into higher payments so we get that balance right.

“We think this decision that appears to have been confirmed today will make that task all the more difficult.

“We want to reiterate our call for the government to be courageous and shut down tax loopholes and wasteful spending at the top end. We have identified around $6 billion in savings from tax avoidance measures such as the use of private ‘discretionary’ trusts and capital gains, International companies reducing tax paid in Australia, and the churning income through super accounts to avoid taxes on wages.

“We’ve also put forward proposals to tackle poorly targeted spending programs and tax breaks such as the health insurance rebate for ancillary or ‘extras’ cover not related to hospital care; the 20% tax-break for medical ‘gap fees’ exceeding $2,060 a year; and the Senior Australians and Pensioners Tax Offset.

“Budgets are about government priorities and this is where governments should be focusing their attention, not going after measures that assist families that need the greatest assistance and actually help reduce poverty in our country,” Dr Goldie concluded.

Media Contact: Fernando de Freitas 0419 626 155

ACOSS Budget Priority Statement 2013