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Issue #1766      February 22, 2017


In what is one of its most despicable, low acts so far, the Turnbull/Abbott government is now attempting to rip billions of dollars out of the pockets of social security recipients to fund the National Disability Insurance Scheme (NDIS) and $50 billion in tax cuts for the largest corporations.

On February 8, Social Services Minister Christian Porter introduced a bill to rob social security recipients of more than $7 billion. Then, on the very next day, the government continued Second Reading speeches on legislation to cut company tax rates to 25 percent.

“We are improving the tax system for business and better aligning it with a culture of business investment and development to foster jobs and growth,” Treasurer Scott Morrison when speaking to the tax cuts in September last year.

The first two points are true. But as for fostering jobs and growth, that is one big lie. Tax cuts foster larger profits, greater wealth in the hands of a few and fund investment in labour saving technology or offshore projects. The cuts to social security will contribute to the funding of corporate tax cuts.

“Political football”

Groups representing people with disabilities have come out strongly rejecting the funding of NDIS through cuts to other social spending.

“We are shocked and troubled about this announcement from Treasurer Scott Morrison that once again links cuts to social security with funding for the NDIS,” Disabled People’s Organisations Australia chief executive Therese Sands told the ABC.

“We strongly reject measures that would seek to fill any perceived or potential shortfall in NDIS funding through a shift in revenue from other human services.”

She called for politicians to stop treating the NDIS like a “political football”.

“Trading off essential and vital disability support with cuts is a false economy that will hurt many people with disability and is simply not on – completely unfair – and goes no way to ensure the long term sustainability of the NDIS, which the government says is the intention,” Sands said.

Targeting the poor

The proposed cuts total an estimated $7.3 billion. They target age pensioners, low income families, students, young unemployed, carers and others.

The bill also includes provisions for small increases in Family Tax Benefit Part A, the youth allowance, paid parental leave and childcare subsidies as well as the company tax cuts.

“The government must halt the relentless attacks on people on low incomes and abandon its unfair budget strategy. Families on low-incomes, the unemployed, single parents, students, people with a disability and aged pensioners should not be treated as easy targets,” St Vincent de Paul Society National Council CEO Dr John Falzon said.

“We cannot afford company tax cuts and generous tax concessions to the wealthy, when at the same time the government claims to lack the revenue it needs to fund basic family payments, income support and essential services like schools, health care and community legal services.

“Despite more than two decades of uninterrupted economic growth, inequality in Australia is growing and people are being forced to turn to charity as a default mode of delivering social security,” Falzon said.

Age pensioners hit again

More than 330,000 age pensioners lost or had their pensions cut from January 2017 with the introduction of a harsher assets test. Now they are expected to make a further contribution to “budget repair”.

New pensioners face a reduction of $14.10 per fortnight for singles or $10.60 each per fortnight for couples as the government removes the energy supplement. Commonwealth Seniors Card Holders would also lose their supplements. This might only mean a glass of wine to Morrison, but for pensioners every cent counts.

Age pensioners are already struggling to survive with the help of charities and families on incomes well below the poverty line. The government should be increasing pensions by at least $50-$60 a week and phasing out assets and means testing.

It is a class question, a choice between putting retired workers or profits first.

Superannuation tax breaks, which serve the rich as a massive tax rorting scheme, cost taxpayers $32 billion annually – one and a half times the cost of Medicare! Budget repair is needed, but along lines of cutting out the superannuation and other tax rorts, and increasing the pension.

Racist undertones

The period over which the age pension and some other payments can be paid while overseas will be reduced from 26 to six weeks at their normal means-tested rate of payment before the amount is adjusted according to the pensioner’s working-life residence.

This change only affects pensioners who have spent less than 35 years of their working life in Australia. A pensioner who has resided in Australia for less than 35 years of their working life would have their pension rate reduced after six weeks abroad on a pro rata basis after being overseas according to how long they have lived in Australia.

This will also apply to some widow B pension recipients, and disability support pension recipients who presently have unlimited portability and whose continued inability to work occurred overseas rather than in Australia.

This is most likely to affect migrants who wish to visit families or even spend their latter years in their homeland. It has racist and punitive overtones. Economically, it makes no sense. The government claims the ageing population is a problem and rising medical costs are unsustainable. Why discourage seniors from spending months or even years overseas, the amount of pension paid is peanuts in the big scheme of things? The savings in aged care facilities, hospital and medical bills would be far larger.

The age pension supplement would be removed after six weeks. The supplement was introduced in 2009. It combined the value of existing allowances for telephone, utilities allowance, pharmaceuticals and a GST supplement into a single payment.


The Family tax benefit Part A supplement will be phased out by January 2018 and family tax benefit Part B supplement will also be phased out.

There would be an increase in the maximum fortnightly payment rates of Family Tax Benefit Part A by $20.02 per fortnight for each child in a family aged up to 19. The youth and disability support pension recipients living at home would be increased by $19.37 per fortnight for under 18-year-olds.

Presently, mothers can access to both 18 weeks of paid parental leave as well as any employer-provided parental leave pay. The bill increases the maximum number of weeks of government-provided paid parental leave from 18 to 20 weeks but employer-provided leave is deducted from the government payment.

The childcare subsidies still fall far short of what is required if low income workers are to gain access to quality care without spending most of their income on childcare.

Unemployed youth an easy target

Unemployed youth take a king hit. The government wants to extend by one week the waiting period for the youth allowance and introduce a four-week waiting period before under-25s receive income support. In all that totals five weeks.

At the same time the bill provides for an increase in the qualifying age for Newstart allowance and sickness allowance from the present 22 years to 25 years of age. In the future young people between the ages of 22 and 24 years could claim the youth allowance instead of Newstart.

While unemployed youth are attempting to live on fresh air for five weeks before becoming eligible for income support, they will be made to jump through the usual bureaucratic hoops and activities.

When they eventually receive income support they will find it has been reduced by $45 a week. The Youth Allowance is presently $438 and the Newstart Allowance is $528 a week. Surviving on $528 a week in a city such as Sydney or Melbourne is difficult enough, let alone meeting the costs of study, transport, clothing for job interviews and so on.

And Social Security Minister Christian Porter has the gall to claim the bill will “improve the fairness and sustainability of government payments”!

Porter disingenuously attempts to defend the government’s cuts: “With youth unemployment more than twice as high as the general unemployment rate at 13.3 percent compared to 5.8 percent as at December 2016, it is imperative that the income support system provide the greatest incentives for young people to find work and be self-sufficient where they are able to, or to undertake further education or training to increase their employability.”

Behind the Minister’s words lies more than a hint of the usual “dole bludger”, “work shy” tones. He talks as if unemployment is a “lifestyle choice”.

Driving people into poverty does not make them more employable. It is more likely to create health issues and make it more difficult to find a job. Nor does it create jobs in a market where the number of unemployed seeking work far outnumber by many times the number of job vacancies.

For youth in particular, without previous work experience or possibly the necessary skills, it can be more like mission impossible.

As for gaining skills and qualifications, prohibitive university, TAFE and VET fees make it extremely difficult. There are student loan schemes, but how many young unemployed want to risk running up debts that can run into the tens of thousands of dollars.

The government is also proposing cutting out the education entry payment. Another move makes it more difficult to study.

Neo-liberal agenda

We are constantly being told about unsustainable spending on welfare, Medicare and the age pension. But the facts do not stack up.

One of the fastest growing areas of expenditure is on military. The government, on instructions from the US, has an annual military spending target of two percent of GDP. It is budgeting, and has quarantined this budget, for one trillion dollars over the next 20 years.

At the same time it is punishing people for being poor. It treats the unemployed, people with disabilities and others with total contempt. It sends out dog whistles with its spin to sell its unpalatable actions.

Behind these cuts, lies the neo-liberal agenda of phasing out income tax and privatising government services. The two bills before Parliament serve these ends. They are very much part of the class struggle in Australia and require strong opposition from working class organisations and people.

As Falzon says, “Poverty is not a personal choice. But our willingness, as a society, to remove the causes of poverty and inequality, is a choice …” National Overview 2015, St Vincent de Paul Society.

So far Labor and the Australian Greens have come out against the cuts. Pauline Hanson supports them and Nick Xenophon is in agreement with the government on some of them.

Next article – Editorial – Fuelling fear and hostility

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