This is wrong on both moral and economic grounds.
Morally it's wrong to cut what is already a pittance, especially when tax cuts are being given to people who just don't need them. To illustrate the point, my partnered Disability Support Pension last financial year was around $16,500. This gov wants to cut money from that? How are people supposed to survive?
Yet this is more than Newstarve. Yet still the gov wants to cut money from Newstart. We're talking real poverty here, abject poverty with no escape. Nobody wants to be on Newstart in such a diabolical struggle to get by (any more in fact than someone wants to have such poor health as to pass the diabolical tests to qualify for the DSP). Any notion that it's some kind of career choice is absolutely wrong. To punish people for their unfortunate circumstance is, again, morally wrong.
Economically it's wrong. Not just the simple fact that it's impossible to survive already on Newstart, or that people in my position face a big struggle financially when in said unfortunate circumstances, but it's wrong economically for the economy. The gov says it will save $1.3billion over 4 years. By taking the money from the poor that will be exactly $1.3billion ripped directly out of the economy and unlikely to be replaced by tax cuts for the well off.
It's not rocket science. We spend every last cent we get, whereas tax cuts for people that don't need it will likely mean the money will simply sit in the bank.
As Dr Goldie raised with you when you met with ACOSS in January, an increase to Newstart to support people locked out of paid work is the single most immediate and effective measure needed to reduce the level of poverty and inequality in Australia.
At the same time, your Government, however, proposes to retain tax concessions as part of the carbon price compensation which benefit every income earner, including those on the highest incomes. It also plans to cut taxes for companies and people on higher incomes over $80,000 per year. These tax cuts will cost the budget over $9 billion over the forward estimates.
This approach to reducing the Budget deficit is unconscionable. Australia cannot afford such tax cuts when the Government is moving to cut the incomes of people struggling to survive on the lowest incomes in Australia, and living in poverty. It will also have a contractionary effect on the economy, with people on lower incomes being the ones who spend every cent they receive in the economy.
As organisations representing people who rely on social security payments, we urge you to withdraw this proposal to remove the Energy Supplement which will plunge people further below the poverty line. Whatever its original purpose, this is money that people in poverty need every fortnight for their most basic living costs, as well as those of their children. ACOSS pdf open letter