Response to the Federal Budget - ACOSS

The May Federal Budget was possibly Peter Costello’s last as Federal Treasurer according to some political pundits but has he delivered in the area of social welfare. According to ACOSS it’s a cost-shifting exercise set to hurt rather than help low to middle income Australians.

The Australian Council of Social Service President, Andrew McCallum says the Budget shifts the costs of basic health and education services away from the Government and on to low and middle income earners.

McCallum says low and middle income earners will pay for the proposed tax cuts whenever they visit the doctor or send a child to University. Tax
cuts should not be a priority at this time – just three years after income tax was cut by $12 billion. These tax cuts will do nothing for jobless people – homeless people, people with disabilities, unemployed people, sole parents, students or age pensioners – who will be pushed further behind.

He says the priority should be new investment in public health, education, housing, income support, and community services. These are core
Government responsibilities. They should not be shifted to the users of those services.

He says the health and education changes signal a shift away from a system that entitles all Australians to affordable and accessible health and education services irrespective of their capacity to pay. If the tax cuts are implemented, this shift will be further entrenched.

ACOSS says that for $4 a week in their pockets, low and middle income earners are being asked to take some very big risks, including:
 Higher doctor’s bills for middle income earners and queues and lower quality health care for concession card holders — the average “gap fees” paid now are $12 a visit or $3 to $4 a week. This could easily double under the Government’s changes.
 It will cost more for a university place — up to $2000 more a year for some courses. More students from high income backgrounds can buy their way into university, while queues for places continue to lengthen and student debt rises.
 The crisis in our public hospitals will worsen — public hospital funding is cut by more than $100 million a year in this Budget.
 Public housing waiting lists, already over 200,000 will grow even longer — no action in this Budget
 Gap fees for child care services will continue to rise — already an average of $50 for full-time day care.

It says two key reform programs promised by the Government have faded into the background with this Budget:
 Low and middle-income families will miss out on financial relief through improved family payments and paid maternity leave.
 Jobless Australians will miss out on reforms to social security and the Job Network to remove poverty traps and payment anomalies, simplify the system, and improve work prospects and incentives.

ACOSS says there are some positives in this Budget for disadvantaged Australians. They include the extra funding for employment and child care
services for people with disabilities, a small innovation fund for Job Network providers, and the easing of social security penalties that formed part of the Australians Working Together package.

McCallum says unemployment is forecast to persist at the unacceptably high rate of 6% for the next two years but there are too few initiatives to
help jobless people into work.

He says there is no commitment to fund reforms foreshadowed by the Government to remove anomalies from the social security system, and to
improve financial help for low and middle-income families with children.

He argues that surpluses should be used to improve financial support and services for the most vulnerable. Instead of cutting income tax the
Government should cut the billions of dollars in ‘welfare’ for the well-off such as big discounts on health insurance, discounts on up-front university fees, and concessions for high income retirees.

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