Federal Treasurer Joe Hockey has been forced to defend his Federal Budget to the Not for Profit sector, saying that while the Coalition’s Budget may seem tough, society’s most vulnerable will end up paying unless “remedial action” is undertaken.
Speaking in Sydney at a post-budget lunch organised by the Australian Council of Social Service (ACOSS) and attended by more than 200 sector leaders, Treasurer Hockey said: “If we don’t start to live within our means sooner or later the people most vulnerable in the community are going to be the ones most affected.
“This budget is not about being popular. Nor is it about making people happy. It’s about doing what we believe must be done to lift the quality of life that people are going to have into the future.”
Hockey delivered his first budget – coined by ACOSS as an attempt to ‘divide the nation’ – last week amid strong criticism from the Not for Profit sector.
The Treasurer’s defence however came as ACOSS released new figures that reveal that people on low and middle incomes will carry the overwhelming burden of repairing the Federal Budget.
“The burden of restoring the Budget will not be fairly shared,” ACOSS CEO Dr Cassandra Goldie said.
“Over the next four years, people and families living on low incomes will be expected to contribute over half the savings in the Budget (52 per cent), compared with less than one sixth coming from people on high incomes.
“More than $19 billion out of $37 billion (52 per cent) in budget savings in key programs and services over the next four years will come from reductions in spending on programs that mainly assist low and middle income earners. Only $5.7 billion (15 per cent) are tax increases or savings in programs mainly benefiting people on high incomes.”
At the ACOSS post-budget event yesterday the Treasurer said: “Unquestionably there has been an expansion of the welfare system over the years.
“But in extending what is deemed to be welfare, higher and higher up the pay scale and what it means is you can afford it while you’ve got money coming in but then when the money doesn’t come in how do you pare it back?
“What we’d really like to see is a strong, entirely sustainable safety net in Australia. And the balancing act is trying to reduce the spread of welfare but at the same time trying to ensure the welfare safety net is strong.”
Dr Goldie said that while there were some elements of the budget the sector was pleased to see, they were obviously hoping to see some very different policies.
“Why have we now seen a budget – which we said at the time and we maintain this view – that seems to divide us… where we know that the level of poverty is most entrenched in the experience of young unemployed people, single mothers and children living in poverty and the biggest hit is on those lowest income families,” she questioned.
“And we have not yet done anything in this budget to look at the assets test on the aged pension, we’ve got people who are able to own their own multi-million dollar home and still be able to claim a part pension.
“That’s what throws up to us why we don’t have a budget that’s delivered on targeting government funding where it’s needed the most.”
But the Treasurer denied that the government was seeking to divide the nation, saying the claim could not be further from the truth.
Among the key themes to emerge at the lunch were concerns around youth, single parents, families and unemployment.
The Treasurer appeared lost for words when pressed on questions around the cuts to the family tax benefits by National Council for Single Mothers and their Children chief executive Terese Edwards, the Treasurer stalled, unable to provide an answer.
“I implore you to hit the pause button, do not proceed; particularly in regards to slashing family tax benefits and I would really like to hear from you that you may reconsider,” Edwards said.
Hockey attempted to reassure sector leaders that the Government was interested in ongoing conversation.
“It’s not the last word. It’s the first word,” he said. “And I am here to engage in constructive dialogue with ACOSS and others for our term in government.”
Author: Jackie Hanafie of Pro Bono Australia