The Nick Xenophon Party (NXT) has confirmed that it will not support the Turnbull Government’s welfare omnibus bill, thus punching a $4 billion hole in the federal Budget. From The AFR:
The federal government will look at raising taxes or slashing spending elsewhere after the Nick Xenophon team announced it would not be supporting the omnibus bill…
Senator Xenophon suggested on Tuesday that the government should instead increase the Medicare levy – which has already been raised to help fund the NDIS – or cut defence spending…
In a statement issued on Tuesday morning, the NXT said the child care reforms were important but “come at too high a cost to families by way of the scrapping of Family Tax Benefit (FTB) supplements (without adequate compensation) and cuts to Paid Parental Leave”.
“The Treasurer’s announcement that any savings from the Omnibus Bill will be tipped into the NDIS Savings Fund are considered by the Team to be ‘robbing Peter to pay Paul’ and viewed in the same way as holding child care reforms hostage to FTB cuts,” it said.
“As a negotiating tactic, this is as subtle as a sledgehammer. Pitting battling Australians against Australians needing disability support services is dumb policy and even dumber politics”.
Independent Senator Jacqui Lambie said she, too, would be voting against the bill.
Recall that the welfare omnibus bill involved a range of measures that were to generate $4 billion in Budget savings over four years, including:
Savings:
- Phasing-out of the Family Tax Benefit (FTB) end-of-year supplement by 1 July 2018 (saving: $4.7 billion);
- Ending carbon tax compensation for new welfare recipients from 20 September 2017 (saving: $933.4 million);
- Abolishing FTB Part B for single parent families when the youngest turns 17 (saving: $440 million);
- Requiring unemployed people aged between 22 and 24 to access Youth Allowance instead of Newstart (saving: $431.3 million);
- Ceasing pensioner education supplement (saving: $201 million);
- Extending waiting period for most welfare payments (saving: $189.4 million);
- Extending waiting period for under-25s receiving Youth Allowance to four weeks (saving: $169.5 million);
- Pensioners that have worked for less than 35 years in Australia will have benefits cut-off after they have been overseas for six weeks (saving $168.4 million);
- Freezing for three years eligibility thresholds for government payments (saving: $160 million);
- Ceasing payment of pension supplement after six weeks temporary absence overseas and immediately for permanent departures (saving: $123.6 million); and
- Ceasing education entry payment (saving: $42.3 million).
Costs:
- Increasing FTB Part A by $20.02 per fortnight for each child up to 19 (Cost: $2.4 billion);
- Introducing new childcare reforms (Cost: $1.4 billion);
- Increasing maximum paid parental leave from 18 weeks to 20 weeks (Cost: $688 million);
- Automating income estimation for welfare (Cost: $38.1 million);
- Incentives for unemployed to pick fruit (Cost: $27.5 million); and
- Training for under-25s waiting for Newstart (Cost: $0.8 million).
Under these measures, an estimated 1.5 million Australians would have seen a reduction in FTB supplements, partly offset by 1 million people receiving enhanced child care support.
NXT’s opposition to the welfare omnibus bill probably means that it will also oppose the Government’s company tax cut package. After all, it would be highly inconsistent for NXT to argue on the one hand to possibly increase taxes to pay for the NDIS while on the other hand gifting foreign owners/shareholders of companies $8.2 billion per year in tax cuts.
