Catholic Welfare AustraliaOpinion Piece
Topic: 2005 Budget
Author: Mr Frank Quinlan, Executive Director
Catholic Welfare Australia
"Part of what makes Australia a good and decent society is our willingness to tilt the playing field in favour of low and middle income families with dependent children. This has been a defining philosophic commitment of mine for the past 20 years, not least in the area of taxation reform."
These are the words of the Prime Minister, during his Menzies Research Centre Address in Sydney last week.
Reflecting on the budget, Catholic Welfare Australia is dismayed that rather than tilting the playing field in favour of low and middle-income earners, it seems many of them are being sent to the sidelines, off the playing field altogether.
In a budget that returns a surplus of almost $9 billion, with all the economic security that sound budgeting brings, homeless Australians will not find any significant new programs to increase the national public housing stock and the mentally ill will not find radical new measures in our health system.
In a budget that implements very significant and welcome investments in pre-marriage education, family relationships support, and relationship counselling – single parent families face declining financial support and increased pressure to return to the paid workforce. Those who may wish to remain at home to invest in their children and our communities find their choices undervalued by a "work-first" agenda.
In a budget that delivers an annual tax cut of more than $2,000 to those earning more than $100,000 a year, and relieves many of the so-called nuisance taxes paid by business, low income earners (those among the 20% of Australian households that earn less than $12,000) receive a tax break of only $1.54 per week (not enough to by a hamburger or a milkshake). Families on low incomes and middle income will have twice that figure consumed by the shift in the Medicare Safety Net in any case.
Here is an example of how the changes in the Budget will affect a single mother with one child that has just turned 6:
Sally is a single mother with one child that just turned 6. Under the changes announced in the Budget, she is now ineligible for Parenting Payment Single and is transferred to "enhanced" Newstart Allowance.
Sally finds work 15 hours a week as a childcare worker. That pays the minimum wage and her total employment income is approx $360 a fortnight.
Before the Budget, if Sally was receiving Parenting Payment Single, her benefit would be reduced by $85.30. She would receive a part-payment of $391 per fortnight, in addition to her employment income. A total of $751 a fortnight.
Following the budget, if Sally was receiving "enhanced" Newstart Allowance, her payment would be reduced by $55. She would receive a part-payment of $377. A total of $737 a fortnight.
Sally’s problem is that the taper rate for Parenting Payment Single actually reduces her income by more, but the taper kicks in at a lower rate of income. Because the basic rate for Parenting Payment Single is more generous than Newstart, she would still receive $14 a fortnight more under the pre budget system.
Harder to measure is what might be called the "mood" of the budget. In this context, Catholic Welfare Australia would like to ask "At what stage in the economic cycle could we most afford to invest in the poor?" "At what stage in the economic cycle could we most afford to give comfort to single parents, the disabled and the mentally ill?" "At what stage in the economic cycle would we expect special job opportunities to be created for the low skilled?"
But Australia finds itself on the crest of an historic peak in economic conditions, without answers to these fundamental questions. Instead, we speak the language of mutual obligation, as if it is the long-term unemployed who have failed in their obligations to us. We speak of mutual obligation as if it were single mothers, caring for our children who have failed to meet their obligations to us. We speak of mutual obligation as if it is low-income earners who have failed in their obligations to contribute enough taxes to our burgeoning economy.
We are always obliged to assist those least able to participate in society and those who share least in its wealth, and in a time of great wealth there is little excuse for us not doing so. Over time this budget will be judged as a lost opportunity to bring about real change for the most disadvantaged.
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