Income Inequality to Worsen Under Budget -Senate Report

An all-party Senate Committee Report table in the final days of Federal Parliament has warned that inequality and poverty will worsen in Australia under the Abbott Government’s current Budget plans.

The strongly worded report by the Senate’s Community Affairs References Committee, Bridging our growing divide: inequality in Australia, says the harsh approach of the Federal Budget will push more people into poverty and disadvantage and calls for many of its more punitive measures to be abandoned.

The Senate Committee that delivered the 273 page Report was chaired by West Australian Greens Senator Rachel Siewert with the Deputy chair, Queensland Liberal Senator Sue Boyce.

According to the report, current Government policy and in particular the 2014–15 Budget will disproportionately and negatively impact people living on low incomes.

“Much of the evidence showed that the likely impact of the Budget measures will be to exacerbate income inequality and poverty in Australia,” the report said.

“It is critical that the harsh measures to cut and withhold benefits proposed in the 2014 Federal Budget not be passed. It is also crucial than reform of Australia's social security payment system not only leaves no group financially worse off, but increases the financial position of those facing greatest hardship,” VCOSS CEO Emma King said.

“This report is further evidence that the Federal Government has taken the wrong approach in seeking to make budget savings at the expense of supporting our most vulnerable people.  

“The Senate Committee recommends the Government should not proceed with many of the harsher budget measures, including the proposed cuts to indexation of pensions and welfare payments, the removal of income support for jobseekers under 30, the introduction of a GP co-payment, and many of the so-called “Earn-or-Learn” provisions for young unemployed people.

“The Committee has also recommended that the Commonwealth Government should reconsider its decision to terminate the Youth Connections program and other programs that help transition young people out of unemployment and into lasting and meaningful work.

“The inquiry found that income inequality has worsened since the 1980s and disproportionately affects vulnerable groups in our society, including people receiving income support, Aboriginal and Torres Strait Islander peoples, people with a disability, people with a mental illness, young people and single parents.”

The Senate Report recommends that there should be an analysis of income inequality in Australia as a result of budget changes.

“The evidence provided to the committee raises issues around the best way to provide this analysis. There has been support for this work to be undertaken by the Treasury or the Australian Bureau of Statistics. The committee believes that consideration should be given to the most effective process to achieve this analysis,” the report said.

“The committee recommends that the Australian Government establish a consultation process to engage key stakeholders in discussions on how to set minimum levels for social security payments in Australia, including Commonwealth Rent Assistance payments and student assistance payments.”

The report also pointed to the current McClure Review into Welfare Reform.

“It is disappointing that a major review into welfare reform options that is currently in train is not properly considering the inadequacy of benefit levels. However, the committee's proposal for reform should not—and will not—interfere with the broader welfare reform process.

“This inquiry has also considered options for Governments, working with welfare agencies and Not for Profit organisations, to promote the education, training and employment prospects of young people at risk of dropping out of school, as well as older workers facing retrenchment and the long-term unemployed.”

The options that the committee favours include:

• developing alliances between schools, employers and vocational education providers to encourage young people to remain at school until Year 12 and provide them with a positive first experience in the workforce;

• developing a plan that will coordinate efforts between governments, employers and vocational education providers to re-train older workers through the vocational training system

• properly fund programs that offer a targeted case management approach to assist the long-term unemployment (back) into the workforce .

The full report can be found  HERE