A fiery meeting of the “key seats’’ group, which includes about 30 MPs in marginal electorates, erupted on Wednesday as MPs challenged the government’s political direction…
A flashpoint at the meeting was the government’s handling of more than $200 million in cuts to community groups that direct funding to vulnerable people…
The issue continues to loom as a flashpoint among MPs as the government frames the May budget and seeks savings to counter declines in revenue.
Readers might recall that in the lead-up to Christmas, then Community Services Minister, Kevin Andrews, threw his moral compass out the window and informed a broad range of welfare agencies that they would no longer receive federal funding, with the homeless and the low-income housing sector particularly badly hit by Budget cuts.
This move angered many Coalition MPs, who were not made aware of the funding cuts, and were then forced to explain them to angry constituents.
Thankfully, new Community Services Minister, Scott Morrison, since restored the groups’ funding on an interim basis until to 30 June, although future funding remains up in the air.
Leaders within the Coalition would do well to heed the MPs concerns. A key reason why the Abbott Government is languishing in polls, and its Budget measures remain stuck in the Senate, is because they are widely perceived as unfair.
This view was encapsulated by the Freedom of Information (FOI) request lodged by Fairfax Media last year, which revealed Treasury modelling showing the measures introduced in the May 2014 Budget would be highly inequitable and punish lower income workers:
The combined effect is that an average low income family loses $844 per year in disposable income (earnings after tax and government payments) due to the budget. Middle income earners forgo $492; while a high income family is down by $517.
As argued many times previously, instead of attempting to claw back loose change from the most vulnerable members of society in a desperate bid to plug the Budget deficit, the Abbott Government must instead attack Australia’s world-beating tax expenditures – such as superannuation, negative gearing, and capital gains tax concessions – which deprive the Budget of many billions of dollars of revenue, make the tax system less progressive, and overwhelming benefit richer, older Australians.
Tightening the Aged Pension also makes good sense. That the biggest asset most households retiree with – one’s principle place of residence – is essentially excluded from their capacity to fund their retirement makes little ethical or budgetary sense. The Aged Pension is also one of the largest and fastest growing areas of the Budget, and very poorly targeted.
Ultimately, the only way for the Coalition to get back on track, and earn a second electoral term, is to craft a Budget and reform program that places equity considerations front-and-centre.
Australians will accept reform, but only when it is clearly explained and the burden is equitably shared. Coalition backbenchers seem to recognise these facts, and it is time for the leadership to do likewise.
