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#Budget2014 reactions on #health #Indigenous affairs #welfare & more

This post compiles rolling reactions to the 2014-15 Federal Budget, handed down tonight, and including major cuts to health, welfare, and education, and a raft of tough measures affecting vulnerable groups – including the much-flagged introduction of a $7 GP co-payment.

***

Professor Mark Harris (comment)

The $7 co-payment on Medicare services and increases in the PBS co-payments will cause hardship for disadvantaged patients on low incomes.  It will also have a chilling effect on efforts to improve continuity of care and prevent presentations to hospital emergency departments (ED).  A patient requiring a GP visit which also involves a pathology test and imaging would have at least a $28 co-payment (including a second GP visit to find out and review the results of the tests).  This will create a strong incentive for patients present to hospital.  Although they will have longer waiting times at hospital (as demand increases thereby reducing ED capacity to deal with emergencies), these disadvantages for low income patients will be offset by the lack of a GP co-payment and the convenience of getting it all done in one place and one time.  The only way to reduce this extra demand will be for States to introduce their own co-payments, although it will be costly to establish and operate money collection systems  within the ED especially after-hours.    The Medicare co-payments will also make it more difficult to shift care of low income patients from the ED or hospital or community health services back to general practice.  This will affect referral from ED to GP after-hours services, referral of patients back to general practice on discharge and referral from community health or ambulatory services back to general practice (eg for wound care).  The end result of all this is likely to be less fair and less efficient.

 

****

National Welfare Rights Network (media release)

 

“This is a budget that is very harsh on people living on low incomes including people with disabilities, the jobless and young people.  Structural changes in the budget will cause financial harm to people on low incomes for years to come.  By contrast, people on high incomes face some temporary and short-lived pain”, said Maree O’Halloran of the National Welfare Rights Network.  “Most of the heavy lifting in balancing the budget is being achieved off the backs of those who can least afford it.”

 

“The modest changes targeting high income earners, such as the deficit levy and the freeze to politicians’ wages will be little more than a temporary irritant, but the slug to unemployed people, young people and people with disabilities are permanent and punishing.

 

Restricting unemployment payments of people under 30 to rolling six monthly spells heralds the beginning of the Americanisation of Australia’s welfare system. Time-limited welfare payments aren’t the way we do things here. This extreme proposal is a recipe for increased homelessness, poverty and social division.

 

Single parents on Parenting Payment, 90% of whom are women, are again this year the target of harsh budget cuts. Around 220,000 single parents face lower payments due to heartless changes to payment indexation rules. Cuts to Family Tax Benefits will send families to the poorhouse. Many single parents on Newstart will feel betrayed by the counter-productive decision to axe the Pensioner Education Supplement (PES), which is paid to over 41,100 people. This payment provides up to $64 a fortnight to 16,788 single parents and 18,100 people with disabilities with the costs of education and study.

 

It appears that processes around the Commission of Audit, the Budget, and the McClure Welfare Review are setting the scene to strip away the protections of Australia’s social security safety net.

 

For over nine months, some sections of the media have created an atmosphere of fear, where the unemployed and people with disabilities have been demonised.

 

Australia does not have a budget emergency, and compared to other OECD countries, Australia is travelling remarkably well. Australia has had continuous growth since 1991, and avoided the pain of the global financial crisis in 2008.

 

Our debt to GDP ratio is relatively low compared to other OECD countries and we are a low taxing country.  We are also one of the lowest spending counties when it comes to welfare. Australia currently spends 8.6 percent of our national income on income support, compared to an OECD average of 13.2 percent. The share of wages in GDP has also been declining for about two decades with the profit share rising.  As a result, we are a more a country that tolerates more and more inequality.

 

Of course our national budget needs careful managing, and, like many nations we face the challenges of an ageing population.   However, it is wrong to manufacture an economic crisis to justify deep and harsh spending cuts which will disproportionately hurt the poor and disadvantaged.

 

It’s disappointing that the Government is cutting programs rather than undertaking the essential reforms needed to make our tax system fairer. Tackling excessive superannuation tax concessions, which favour high income earners, and reviewing negative gearing, private trust arrangements and other tax loopholes should have been a priority.

 

The Government has focussed on the capital infrastructure needs of the country, but it has failed to adequately invest in the nation’s human infrastructure.  We need adequate investment in employment assistance, training, support for TAFE and programs like Youth Reconnections.

 

National Welfare Rights will assess this budget by how it affects people on low incomes and vulnerable people and how it equips us for the future ageing of our population. Most importantly, we need to assess whether the changes make us a better society.

 

The test of the changes to the Disability Support Pension will be if people achieve sustainable paid employment or are just pushed into poverty on a lower payment with a harsher means test. Changes affecting people on the Disability Support Pension aged under 35 must be carefully and sensitively implemented. Activity testing needs to be constructive, should not exacerbate existing medical conditions, and not place people at risk of being penalised.

 

The real problem for people under 35 with disabilities is the lack of employment opportunities and the reality that employers – and even the Government – are unwilling to take a chance and give them a start in life. What employer or business will give a person under 35 a go if some elements of the tabloid media have already labelled people on the Disability Support Pensions as lazy shirkers and scroungers?

 

People reliant on Centrelink support will be bitterly disappointed that this budget contains no measures to address the growing queues at the counter or on the telephone. The missing correspondence and excessive review delays and poor quality letters that the Commonwealth Ombudsman recently highlighted won’t be improved by cutting staff. An austerity budget like this one means that more people need the assistance of experienced and knowledgeable public servants.

 

Our message to Labor, the Greens and the minor parties in the Senate is that we want them to stop the attacks on welfare recipients, not a tax on high income earners (even if it is only temporary).

Despite some modest positive initiatives, this is a budget that targets people on low incomes who are struggling to make ends meet.

 

Budget changes that are of concern to NWRN:

  • ·         Increasing to the Age Pension eligibility age to 70 by 2035.
  • ·         Repetitive reviews the medical conditions of DSP recipients under 35
  • ·         Failure to increase $510 pw Newstart Allowance, which will shrink to half the rate of pension by 2040
  • ·         Eligibility age for Newstart and Youth Allowance increased from 22 to 25 years, from 1 January 2015, saving $508 m over 5 years
  • ·         Require unemployed people on Newstart and Youth Allowance aged under 30 to serve a six month waiting period in addition to existing waiting periods.  These job seekers might only receive income support for six month per year, and be required to serve six months in Work For The Dole, with various exemptions, saving $2b over 4 years
  • ·         Harsher job seeker compliance rules, saving $20.9m over 4 years
  • ·         Expand Work For The Dole scheme for 18-30 year olds, costing $14.9m over two years
  • ·         Apply a one week waiting period for all ‘working age’ payments from October 2014, saving $231m over five years
  • ·         DSP recipients under 35 face reviews if granted DSP between 1 January 2008 and 31 December 2011, saving $46 m over 5 years
  • ·         Compulsory participation requirements for DSP recipients with some work capacity under 35, costing $29.3m over 5 years from 2014, with financial sanctions for non-compliance
  • ·         Family Tax Benefit B restricted to families on less than $100,000 per year, until the youngest child turns 6. Low income single parents eligible for a $750 a year for each child aged between 2 and 12.
  • ·         FTB A frozen for 2 years and FTB B frozen for 3, large family supplement tightened, with total changes to FTB saving $7.3b over 5 years
  • ·         Restrictions to Jobs, Education and Training Child Care Fee Assistance
  • ·         Pensioner Education Supplement axed from 1 January 2015, costing $281m over 5 years
  • ·         Employment Entry Payment of $208 axed, saving $65m over 4 years
  • ·         Parenting Payment Single indexed to prices instead of wages from 1 July 2014, cutting payments by $70 over a decade
  • ·         Pensions indexed to prices instead of wages from 1 September 2017, cutting payments by $80 over a decade
  • ·         Axing of the National Rental Affordability Scheme, saving $235m over 3 years
  • ·         Curtail portability for students and restrict DSP overseas portability to 4 weeks, saving $153m and $12.3m over 5 years
  • ·         Axing specialist Career Advice for Single Parents Program, saving $5.8 m over 5 years
  • ·         Axe Centrelink Connection Interviews and Job Seeker Workshops, saving $4.4m
  • ·         Restrict ac