Australia’s $2 billion welfare assault

In what The Australian described as “$2 billion welfare assault”, around 40,000 families initially will be stripped of middle class welfare payments in the first year of the Gillard government’s new budget cuts which target families on “modest incomes”.

Young parents, the long-term unemployed and disability support pensioners will be required to meet strict work and training requirements, or risk having their payments cut. The changes include cut-off thresholds for family payments, the freezing of paid parental leave and the baby bonus for four years, and pushing families off benefits at the upper end of the income spectrum.

Treasurer Wayne Swan said he did not believe the families being targeted were rich “but there are plenty of families out there on incomes of $60,000 or $70,000 year,” he said.

Not only were these welfare cuts imposed by Labor-led coalition with knife-edge grip on power, but Opposition Leader Tony Abbott criticised them as form of “class war” that hammered everyday households. “I am instinctively against these budget cuts to families,” he said.

In his Budget speech, Swan said that in growing economy like Australia’s, having the fourth highest proportion of jobless families in the developed world could not be justified.

The government will slow the growth of the Disability Support Pensions, provided to an estimated 800,000 Australians, by bringing forward strict new work tests, updating the definition of incapacity, introducing new requirements for younger recipients, providing more wage subsidies, and allowing more hours to be worked before payments are suspended.

Long before the unveiling of her Budget, opinion poll support for the Gillard government had slumped in the months since the election last year. John Key’s right-leaning National Party, in contrast, has solid parliamentary support through its coalition arrangements and has formidable lead over Labour in public opinion polls, despite Phil Goff’s persistent accusations that its tax reforms have made the wealthy much better off to the detriment of low-income families.

And the New Zealand Government’s budget deficit – necessitating review of all public spending – is significantly larger per capita than Australia’s as result of the Christchurch earthquake.







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