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Issue #1547      16 May 2012

Budget 2012-13

Headline-grabbing payments is not spreading the boom

Welfare group Anglicare recently reported that 15 percent of Australian families are so poor that they struggle to pay for their most basic needs. Demand for charity food parcels is through the roof. The Gillard government is spinning its latest social security measures as major relief for battlers and their families. “We wanted to make sure the benefits of the boom were spread around the country,” Families and Community Services Minister Jenny Macklin said about a raft of changes to social security contained in the federal budget. But while the Opposition is squawking about cash handout “bribes” and “class warfare”, the reality is that many Australians will continue their slide into poverty as a result of the measures.

The attitude of the Coalition is pure hypocrisy. In government they were the masters of the opportunistically timed cash payment. The baby bonus was their creation. This time it is Labor that is delivering the headline-grabbing payments. Families with children at primary school will get $410 a year in two payments and $820 a year for children in secondary school. This will replace the education tax refund that was difficult to access due to the requirement to present receipts.

Families receiving family tax benefit part A will get a boost of $600 if their combined income is below $78,000. Those earning between $78,000 and $112,000 will get $200. Couples with school age children in the latter income bracket should be about $1,500 better off after July next year when the benefits are added to the “clean energy advance” – the compensation being given for cost of living increases expected as monopolies pass on the cost of the carbon tax to consumers.

These are Labor’s very modest “winners” out of the budget. The biggest losers are the unemployed (a growing group in spite of the latest misleading figures) and sole parent families. The government resisted strong lobbying from a wide range of groups to increase the Newstart payment by $50 per week. Instead, the unemployed will get a $210 cash payment in two instalments from March and September next year. Employment Minister Bill Shorten imagines the sums will help the recipients meet the cost of car repairs, appliance replacement or higher than expected bills.

“The rate of Newstart remains $130 below the poverty line,” WA Greens Senator Rachel Siewert told the media. “The newly announced $210 supplement payment for Newstart equated to a rise of only $4 a week … It is an insult to unemployed Australians.”

A small dose of good news is that claimants of Newstart do not have to wait 13 weeks while they run down any decent savings they might have. A savings threshold of $5,000 for singles without children and $10,000 for all other applicants has now been established. Other thresholds have headed south. Family tax benefit A will now cut out when children reach 18 years of age. It is currently 21 years and was 25 years under Howard.

The hardest hit by the “tough love” measures from the government were sole parents. Labor claims its decision to bump single parents off the parenting payment and onto Newstart when children turn eight is to stop the growth of inter-generational unemployment. Income for about 100,000 sole parents will take a $60 a week nosedive. Parents moved onto the dole will only lose 40c out of every dollar earned above the $62 a fortnight limit for income from employment rather than the usual 50c. That is the “sweetener” for the massive pay cut. Big deal!

The swipe at sole parent benefit recipients panders to the prejudices fanned by the tabloid media and radio shock jocks. It doesn’t respond to the reality of people currently receiving the benefit. The Australian noted last week that almost half of single parent benefit recipients – 55,646 out of 122,630 – already have paid work.

“These are the families who will be particularly hurt by the budget changes,” Welfare Rights president Maree O’Halloran said. “To make ends meet, many parents will have to reconsider their housing options and try to work even more hours, if they can get them. All of this will be while they are trying to care for children.”

Australia’s most financially vulnerable families will pay the biggest price for the much-hyped budget surplus. This was not a Robin Hood budget. It clobbers and bullies the battlers in the community so that the government can be seen to be honouring its promise to be as neo-liberal in its fiscal policy as the Abbott-led Coalition.  

Next article – Budget 2012-13 – Greens get dental reform

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