The Guardian May 9, 2001

Social security recipients need better GST compensation

The Australian Council of Social Service (ACOSS) has called for any 
boost to GST compensation for pensioners to be extended to all social 
security recipients. 

ACOSS President Michael Raper said: "The latest CPI figures for the March 
quarter have revealed higher than expected price rises with rents, 
insurance and public transport all rising markedly. 

"In light of this data, we welcome suggestions that the Government and the 
Opposition are both considering boosting GST compensation for pensioners. 

"This recognises that the GST has had a greater impact on many low income 
households than the Government had anticipated. 

Unemployed people and students; low income full-time workers on about 
$20,000 a year; and people outside the social security system such as new 
migrants and self-employed, have also been hit hard by large rises in the 
cost of basic necessities including rent, electricity, gas, phone and 
insurance bills. 

"For Australians surviving on low incomes every dollar counts. Unemployed 
people and students are already receiving more than $20 a week less than 
the modest age pension. It would be a travesty if this gap in social 
security payments were to widen further, said Mr Raper. 

There is an immediate need for additional GST compensation for all 
pensioners, including age and disability pensioners as well as sole parents 
whose payments are pegged to the age pension and a guarantee that this will 
also be passed on to all social security recipients. 

"Existing pensioner concessions and allowances for electricity, gas and 
phone bills should also be extended to all people reliant on social 
security payments, including the 440,000 Australians who are receiving 
unemployment benefits, Mr Raper said. 

He said also that to properly compensate low income Australians for the 
impact of the GST on rents, Rent Assistance payments should be increased 
and eligibility extended to adult students. 

The difficulties arising with rising prices and shortfalls in compensation 
are one aspect of the regressive nature of the GST which shifts the tax 
burden onto the poorest in the community. 

Additional compensation, while important, should only be regarded as a 
stop-gap measure. The GST must be repealed and the corporate sector and 
rich brought to heel to pay their share of the taxes.

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