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Andrew Barr rebuffs questions about how strugglers can survive rates hike

Date

Kirsten Lawson

Treasurer Andrew Barr.

Treasurer Andrew Barr. Photo: Jay Cronan

ACT Treasurer Andrew Barr has rebuffed a question from Liberal backbencher Giulia Jones about how a young Canberra family budget would survive the latest rates hike with advice to get a “strong union rep” and a decent pay rise.

Mrs Jones on Monday presented a family budget she said was the budget of a real family of her acquaintance, who live in Spence. He works as a school teacher, earning $65,000 a year after tax; she is at home with two children. They get $9000 a year in family tax benefit, although their situation has recently changed, with a new baby now in the mix.

Mrs Jones said they paid $26,000 a year on their mortgage after buying their home four years ago. She said it wasn’t fair that they were forced to pay stamp duty when they bought their house, so were not getting the benefit of the government’s cuts to stamp duty for new home buyers. But they were being slugged by the rates increases now being imposed year on year to pay for the cuts to stamp duty.

On July 1, they were expected to find more money to pay their rates (now $1400), which will increase an average 10 per cent across the city, and 9.4 per cent in Spence, amounting to $130 for the family. Electricity and gas are also rising a combined average of $300 and water bills will increase as well.

Mrs Jones told budget estimates hearings the family was already struggling to survive, their household budget short $57 a year ($74,000 income, $74,057 expenses) and asked how they were expected to pay for the July 1 price hikes.

Mr Barr said their wages would rise with CPI – and he hoped they had a strong union representative to ensure a decent pay rise. His suggestion ignores the fact that CPI is a measure of the increase in the cost of living, so you’re factoring in a CPI wage increase, you would also need to factor in a CPI increase in the cost of living across the board for Mrs Jones’ family, separate from big increase in rates. CPI is running at just under 3 per cent.

Mr Barr also said they would get 10 per cent reduction on insurance tax, which he asserted would amount to $500 off their insurance, based on Mrs Jones’ figures for their insurance bill – health insurance $3250, car insurance $1000 and home insurance $1200. In fact, the cut to insurance tax is only 2 per cent a year and the tax doesn’t apply to health insurance, so their saving is just $44 a year. The 10 per cent reduction referred to by Mr Barr is over five years since 2011-12.

Mrs Jones did not release the names or other details of the family to which she referred but she insisted they were a real family and it was an accurate budget.

If he breadwinner earns $65,000 after tax, he is probably earning about $85,000 in gross income. The ACT budget papers suggest that is much lower than the median family income for Canberrans of $160,000.

Because the husband is a teacher, the union rep for the family is the Australian Education Union. Teachers are yet to settle a pay deal but ACT public servants are finalising agreements that will see their pay increase 1.5 per cent every six months for four years (with an upfront flat payment that benefits lower income earners), roughly in line with CPI.

Mr Barr said the parents received about $10,000 of spending each year from the ACT government. He was referring to the government's breakdown of its overall spending per capita, which shows about $10,000 a head is spent on services for people in mid-life. The amount is about double for children and rises steeply for people aged over 60.

66 comments

  • Sorry Mr Barr but on this occasion you got it wrong. Ms Jones presented a real scenario of working Canberrans. Keeping our jobs so we can pay our bills and feed our families is what's worrying families the most. That's our first priority before anything or anyone else. This response will come back to haunt you as it shows you just don't understand.

    Commenter
    WorkingMum
    Date and time
    June 17, 2014, 8:27AM
    • Not the best response by Mr Barr. We are getting taxed and charged out of existence in the ACT and approaching a point where the QLD Labor Govt was when Campbell Newman came to power.

      I would love to see the real ACT revenue streams and to also know where all the money they have raised has gone during the ousting boom. No one seems to be able to answer that one.

      Commenter
      Unfortunate
      Date and time
      June 17, 2014, 6:12PM
    • I lean Right on economic matters and I support Labor on the phase-out of stamp duty. They are doing it over 20 years - seems pretty fair to me. There is no simple way of abolishing this inefficient tax.

      Commenter
      jg
      Location
      Canberra
      Date and time
      June 21, 2014, 12:16PM
  • Andrew Barr just another self-righteous council member. Barr should resign immediately. Barr's response indicates that he is out of touch with the voters and doesn't give a damn about anyone but himself.

    Commenter
    Sharron
    Location
    Canberra
    Date and time
    June 17, 2014, 8:28AM
    • Proof that Labor are no longer the party of the working class. They now only represent the interests of the inner city elite. Where the solar generated electricity flows are generous, bike paths are plentiful and a tram line will run striaght through the middle of it all. All subsidised by those less fortunate of course!

      Commenter
      Reftel
      Location
      Kambah
      Date and time
      June 17, 2014, 9:16AM
      • Why have a third baby if you're living on the brink?

        Commenter
        Teph 2
        Location
        Canberra
        Date and time
        June 17, 2014, 9:22AM
        • yes stop breeding we can simply replace it with another huge immigration influx like currently done.
          More worker bee's for the nest of the wealthy.

          Commenter
          Mayor Rattenbury-Gallagher barr
          Date and time
          June 17, 2014, 10:04AM
        • Maybe she got pregnant before the ACT and Federal Budget were announced???

          Commenter
          LisaCC
          Location
          Canberra
          Date and time
          June 17, 2014, 11:40AM
        • Yes, I agree, but they could have delayed the third child. Many people delay children or have fewer children due to financial strain. Also, this family - even with the increase in rates - are still paying less than their renting counter-parts.

          Commenter
          Teph 2
          Location
          Canberra
          Date and time
          June 17, 2014, 11:52AM
      • So Andrew show me where the improvements to the ACT are (not including any increase in the number of politicians in the Assembly or their pay increases, obviously they have strong union reps).

        So far your budget has taken an extra $14,000 pa directly from my family. My rates are increasing, electricity and gas has increased and continues to do so. I call on you to justify yourselves, and your continued worth, to the electorate. Because at the moment both the Federal and the local budgets look like legalised thievery to me. All you lot have done is mug the average citizen, I see very little sacrifice from those who lead, but I suppose if you wish to have the equivalent of the Charge of the Light Brigade it is always better to sit on the hill and watch than ride the valley.

        Commenter
        Scooter
        Location
        Kam Berra
        Date and time
        June 17, 2014, 9:25AM

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