Senin, 30 Juni 2014

Federal budget feels pain as savings measures slated for July 1 delayed

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By political correspondent Emma Griffiths

Bank notes Photo: The biggest saving that was due to begin today is a two-year freeze on family tax benefits.

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A hole will be punched in the federal budget from today, with major savings measures that were slated to kick in on July 1 held back because of opposition in the Senate.

But today also marks the dawning of a new regime in the Upper House as the balance of power swings from the Greens to a micro-party cross bench of eight Senators, dominated by the Palmer United Party.

The new Senate will sit for the first time next Monday with a legislative agenda swollen by a Government wish list of election promises and budget measures worth billions of dollars.

The biggest saving that was due to begin today is a two-year freeze on family tax benefits, budgeted to save $397 million this financial year and $2.6 billion over the four-year forward-estimate period.

The Government also put a hold on eligibility thresholds for all payments from today, including the childcare benefit Newstart, parenting payments and youth allowance, to save $160 million this financial year and $1.5 billion over four years.

The indexation of the clean energy supplement, paid to all welfare recipients, was also due to be removed today in a cut worth $42.3 million in 2014-2015 and nearly half a billion dollars over five years.

But for opposition in the Senate, single parents would also have been affected by a switch in the indexation from male average weekly earnings to the consumer price index, which would push down the rate of growth in the payment.

This financial year the cuts were worth around $600 million but the delay will reduce that saving - by how much depends on if and when the new Senate passes the measures.

Government seeks to skip budget negotiations with senators

There is also the chance that the Government will seek to skip the Senate negotiations and introduce some of the changes by regulation, which does not require a majority vote in parliament.

Arguably at the top of the legislative list for the Coalition is the abolition of the carbon tax, which will increase today from $24.15 per tonne to $25.40.

PUP leader Clive Palmer last week revealed he would support legislation to "axe the tax" - granting Prime Minister Tony Abbott his core election promise.

However, PUP has put conditions on its support for scrapping the mining tax which is linked to the payment of the School Kids Bonus.

The failure to repeal that tax means the bonus will be paid out to families again this July, at a rate of $205 for primary aged children and $410 for children in high school.

But one significant budget measure - the 2 per cent income tax rise for top earners or "debt tax" - has already been waved through the Senate with Labor support and will begin today.

Those on incomes of $180,000 and above will pay the Temporary Budget Repair Levy for three years, raising $3.1 billion over four years.

Other changes today include:
  • The increase to the Medicare levy from 1.5 per cent to 2 per cent to help fund the national disability insurance scheme
  • The increase in the compulsory super rate from 9.25 per cent to 9.5 per cent - a rate that will be on hold for four years
  • A $10,000 payment to employers who hire a worker aged 50 or older
  • Federal funding cuts for pensioner and seniors concessions - already compensated for by some state governments
  • A one-year freeze on the pay and allowances for MPs and senior public servants saving $20 million over four years

Government says changes to health budgets will make system fairer

Other budget cuts will begin to take effect, including a $217 million cut to public hospital funding, part of a $1.8 billion saving over four years.

Work for the dole arrangements will begin in 18 locations around the country for job seekers between the ages of 18 and 30 with a full rollout expected next July.

Today also marks the beginning of the Federal Government's $20 million Stronger Relationships Trial, which will give couples $200 vouchers for relationship counselling.

Changes to aged-care fees, largely introduced by the previous Labor government, also take effect from today, meaning some people will need to pay more for support.

Income and assets will be taken into account when working out aged-care fees.

The Government says the new arrangements are designed to make the system fairer and will ensure people who can afford to contribute more for their care.

Federal budget feels pain as savings measures slated for July 1 delayed by Senate - ABC News (Australian Broadcasting Corporation)


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