ACT News

Cuts to concessions will be announced in the June budget, Chief Minister Andrew Barr says

Cuts to concessions will be announced in the June budget, Chief Minister Andrew Barr says, signalling that money will be shifted from higher-income households to those on lower incomes.

Mr Barr points to the need to rein in the spiralling costs of the discounts, which are paid to seniors, pensioners, veterans and others. This year, the discounts amount to $51.3 million.

ACT Chief Minister Andrew Barr: Government discounts will be targeted at people on lower incomes.
ACT Chief Minister Andrew Barr: Government discounts will be targeted at people on lower incomes. Photo: Rohan Thomson

He also wants to improve fairness, with some discounts paid to people in the top income brackets and some paid to home owners but not renters.

Mr Barr indicated on Monday that while he is not looking to cut the amount spent overall, he wants to stop the year-on-year increases.

One focus is the discount on water and electricity bills, which at the moment goes only to home owners. Mr Barr wants to shift some of the money to renters.

Another focus is the 3000 households which  receive a 50 per cent discount on rates bills, with the government considering capping their discount at $700.

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"The overarching principle that will guide this is that I want to target concessions to low income households and, as best as we possibly can, remove concessions from those who are on high incomes," Mr Barr said. "I don't think there's anyone in the city who would disagree with that as a starting point for how you should go about delivering concessions."

The government could not make final decisions until the federal budget was delivered in May since eligibility is set by federal categories such as Centrelink or veterans' pensions. But it has signalled action in these areas:

Rates

Centrelink pensioners and veterans get a discount of up to half their rates bill. For most – 11,000 households – the discount is capped at $700 a year, but there are 3000 households which entered the scheme before July 1997 and receive an uncapped discount.

With the average rates bill now at $1820 and $4000 or more in some inner south suburbs, people getting the uncapped discount are getting considerably more than those whose discount is limited to $700 a year.

The government is looking at ways to claw back some of the uncapped rebates, phasing them out over two years, or freezing them at current levels, perhaps people on the lowest incomes on the uncapped scheme.

About 9 per cent of householders receiving rates discounts are in the top two income brackets.

Rates for community groups and schools

The city's 328 schools, universities, churches, sports groups, childcare providers and retirement villages pay no rates. The government is considering valuing their land and reconsidering the no-rates policy.

Water and sewerage

Water, sewerage and electricity discounts go to people on Centrelink and veterans' cards and on health-care cards.

Because the water and sewerage concession only goes to home owners, not renters, the government is considering scrapping it and using the money to boost the electricity concession, giving about $200 a year more money to renters, with home owners losing about the same amount.

Another option is to reduce the water and sewerage discount from 68 per cent of the supply charge to 50 per cent.

The discounts might also be extended to the 700 pensioners in retirement villages.

Car registration

The 37,000 people on pensioner cards, including veterans' affairs and gold cards, get free motor vehicle registration. The government is considering leaving the gold card concession untouched, but reducing the discount for others to half the registration free, bringing in an extra $4.3 million a year.

Seniors card

Everyone aged over 60 who works less than 20 hours a week has access to a seniors' card which gives them discounts on the likes of motor vehicle registrations, bus fares and spectacles. The government is considering lifting the age to 65, over 10 years.

It is also considering removing the bus discount for seniors card holders or limiting their discounts to off-peak trips.

Part pensioners

Single people earning up to $48,880 and couples earning up to $74,800 are eligible for federal part-pensions, but receive the same discounts as full pensioners. The ACT is considering limiting their discounts to half or three-quarters of the amount paid to full pensioners, saving up to $7 million a year and impacting 11,000 households.

Extending discounts

A new $100 discount on electricity bills could be paid to families on family tax benefit part A (earning up to $100,000).