Budget Hits Australia’s Poorest Families Hardest, ANU Report Reveals
Thursday, 12th May 2016 at 11:53 am
Australia’s poorest families will be hardest hit by the federal budget when the new measures come into place, a new report from the Australian National University has revealed.
The report, which looked at the “hip-pocket” measures expected to have an immediate impact on household budgets in the year 2018/19, showed there was a clear relationship between the impact of these measures and income levels.
In particular the report said families who fall in the bottom 20 per cent of income distribution will most feel the effects of changes to family payments, childcare, taxation, tobacco excise and superannuation.
According to the report, single parent families in the bottom 20 per cent are expected to be worse off by an average $1,209 in 2018/19, which represents a 3.7 per cent reduction in their disposable income.
Meanwhile couples with children in the bottom 20 per cent will be worse off by $1,429 or 2.8 per cent.
The major financial impact for these families comes as a result of the removal of the family tax benefit part A and part B supplements which amount to around $480 per year net of FTB maximum rate increases per child and around $368 per year reduction in FTB B supplements per family.
Some single parent families will also lose around $1,728 in 2018/19 from a lower FTB part B payment.
On average, these families will also be heavily impacted by the increase in the tobacco excise – with an average impact of -$173 and -0.5 per cent for the bottom income category and just -0.1 per cent for the top 20 per cent.Either there are no banners, they are disabled or none qualified for this location!
In contrast, at the other end of the scale, the report said the top 20 per cent of families will be ahead financially by around $211 per year thanks in the main to personal income taxation cuts with a higher second top threshold.
Overall the Distributional Modelling of Federal Budget 2016-17 authored by Ben Phillips, associate professor at ANU Centre for Social Research and Methods, said the budget had a “regressive impact”.
“The losses for the middle and top income groups are proportionately much less than low income families,” the report said.
“Superannuation changes do assist in providing a more progressive budget impact.
“The top 20 per cent wears a $645 burden while the bottom 20 per cent gains $34 each year on average from the selected changes that were modelled for 2018/19.
“The superannuation changes while significant are not enough to alter the conclusion that this budget has a regressive impact.”