MYEFO: ‘Zombie’ Cuts Hurting Vulnerable Australians

The Australian Council of Social Service (ACOSS) has slammed the government for retaining “zombie” cuts to welfare payments in its mid-year budget update.

The mid-year economic and fiscal outlook (MYEFO), released Monday, showed a worsening deficit, but Treasurer Scott Morrison said the government would still return Australia to surplus by 2020/21.

“Once again the government has demonstrated that we do not spend more than we save, and that the predominant mechanism for restoring the Budget to balance is by getting expenditure under control,” Morrison said.

But ACOSS, the peak welfare body, has said the savings were at the cost of vulnerable Australia.

In particular, it criticised so-called zombie cuts – the unlegislated savings measures carried over from previous budgets.

Changes to Newstart eligibility, including the five-week waiting period, cuts and changes to paid parental leave, the abolition of the pensioner education supplement and the education entry payment, and the abolition of the energy supplement are expected to deliver $7.1 billion in savings over forward estimates.

ACOSS CEO Cassandra Goldie said the government was “lazy” and “stubborn” in its policy making by hanging onto previously rejected measures.    

“We’re extremely disappointed that the government has locked in, once again, essentially the same strategy on the budget that was in the 2014 budget under the previous prime ministership of Tony Abbott where… the measures that are associated with improving the bottom line of the budget are cuts to various income support arrangements,” Goldie told Pro Bono Australia News.  

“And now, overwhelmingly, they are measures that will affect people on low incomes.”

ACOSS also said new MYEFO measures, including the abolition of the Green Army program, reduced funding to the wage subsidy program and the automated welfare integrity measures, where when a debt is detected an individual must prove they do not owe debt or repay it, would adversely affect low-income households.  

Goldie said the government had the option to improve the economy without targeting welfare recipients.

“The government says ‘we have no choice, we’ve got a debt and deficit problem, we’ve got declining revenue because of low wages and… and the post-mining boom phase’,” she said.   

“However, the government has made choices here, and it already legislated, at a cost of $4 billion, a tax cut for people on $80,000 plus. And of course it still plans to proceed with its cuts to the company rate at a significant cost, in the billions.

“The government’s made a big choice and, once again, its plan is to pursue budget measures that will affect people on low incomes.

“We think that this is an extraordinary failure to listen to the deep expertise, including voices from the business community, that said we need an increase in the unemployment payment, not to cut it more.

“And, at the same time, a stubborn refusal to engage in policy areas where we would improve our revenue and also it would be good policy. So areas like negative gearing, capital gains discount, moving towards a broad-based land tax in conjunction with the states.”

She urged Labor, the Greens and the crossbench to continue to stand its ground on “unfair” budget measures and “take the lead by finding common ground”.

“If we want a good bounce back in confidence in the community, a sense of opportunity in the economy then we need to remove the uncertainty for people who are currently struggling. Income support, social security has been an important part of us protecting the country from the ravages of deep inequality,” she said.

“This MYEFO is a recipe for driving inequality in Australia at a time when we need to have greater confidence about a balanced approach to the living standards of people in the country.”

Shadow Minister for Families and Social Services Jenny Macklin called for the government to scrap the zombie cuts.

“Mr Turnbull must accept that these zombie cuts are not credible savings to the budget bottom line,” Macklin said.

“Malcolm Turnbull just won’t listen. Australians don’t want these harsh cuts that hurt hard-working families, pensioners and young people.

“The time has come for Mr Turnbull to stop the deception and scrap these unfair cuts from the budget and remove them from the parliament for good.”

Greens leader Senator Richard Di Natale said the government was taking the wrong approach to balancing the budget.

“There is one message in this MYEFO for everyday Australians: unless you’re a big corporation or Liberal Party donor, you don’t matter,” Di Natale said.

“Malcolm Turnbull’s plan to hand out tax cuts to the wealthiest Australians while wage growth remains stagnant is a slap in the face to ordinary Australians doing it tough.

“There is nothing in the Turnbull government’s economic program that addresses the major risks to the economy from the housing bubble or that eases the growing gap between the rich and everyone else.

“The time has come to stop pretending that we can fix the structural problems in the economy without generating additional revenue. Trickle-down economics does not work.”