BUDGET: Gaping Hole for Poorest Remains

Welfare peak body ACOSS says while it welcomes the Federal Government’s vision to secure disability care and dental and schools reform in the Federal Budget, it cannot believe that there’s no income relief for the people who are the poorest.

“We praise the move by the Treasurer to lock in government expenditure on crucial social reforms such as education and disability care, in some cases for a decade.

“We have also been strong supporters of the more equitable and effective system for dental care in Australia and that begins with two-thirds of all children in this Budget. These are not only visionary reforms but long overdue," ACOSS CEO Dr Cassandra Goldie said.

“However, we remain deeply concerned at the failure to reduce the rate of poverty in Australia by increasing the single rate of Newstart and other allowances.

“While we welcome the modest easing of income rates for people on Newstart and other allowances, the Government has failed to assist the four-fifths of Allowance recipients who are unable to obtain paid work.

“Each year we fail to act, this gaping hole in our safety net grows. One in eight people, including one in six children, are living in poverty and an increase in the lowest social security payments would have the most immediate and direct impact in reducing it.

“On the savings side, there are some incredibly important measures in this Budget,”
Dr Goldie said.

“In addition to the welcome increase in the Medicare levy to fund DisabilityCare Australia, we are pleased that the Budget makes significant inroads into closing tax loopholes and inefficient tax arrangements.

“With tax receipts down by over $20 billion from the pre-GFC period, we must pull back from generous tax breaks that are not delivering on policy outcomes and eroding our tax base.

“ACOSS advocated the extension of the Medicare Safety Net threshold, the abolition of the medical expenses tax offset, the capping of self-education expense deductions and the tightening of the thin capitalisation rules, all of which we welcome in this Budget.

ACOSS has also welcomed the integrating of the baby bonus into the family payments system so that it is better targeted but remain concerned about reductions in payments for the poorest families.

“The next step to secure our economic and social progress must be to strengthen revenue. Otherwise we face painful cuts to essential expenditure down the track. Australia is the 5th lowest taxing country in the OECD. If we want a decent safety net, and universal health education and dental services, as well as the housing and infrastructure for present and future generations, we need a sustainable tax base,” Dr Goldie said.

The Brotherhood of St Laurence has called on all political parties to outline an adequate benchmark for Newstart and to publicly commit to a schedule for achieving it following the Budget decision overnight.

"The present allowance fails to keep job-seekers out of poverty," Brotherhood Executive Director Tony Nicholson said.

"We are concerned about the widening gap between Newstart and pensions, which do better at providing a minimum acceptable standard of living."

"Unemployed people include those with low levels of education and limited job experience, single parents, people with disabilities, indigenous people and those who grew up in jobless households. Our research shows these are the very people who have benefitted the least from Australia's enviable economic growth over the past decade.

"We welcome the $300 million allocated in this Budget for measures to help job-seekers in transition to work, but we now call on both parties to pledge a much greater investment to build the capacities of the long-term unemployed.

"This is not a 'cost'; it is an investment in social infrastructure that is as vital as building roads and ports," Nicholson said.

The Budget Papers can be downloaded at http://www.budget.gov.au/2013-14/index.htm