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Abbott government budget will hurt the poor

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Changing disability support 'won't create job opportunities'

ABC journalist and disabilities advocate Stella Young explains why she thinks the budget's tightening of the disability support pension is not the way the go.

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Economists have warned that the federal government’s budget will hit Australia’s poor much harder than the public realise, with obvious ‘'regressive;’ policy changes that will reduce the incomes of the poorest much more than those on higher incomes.

''In terms of the total fiscal package, it’s a very regressive [budget] overall,'' Ben Phillips from the National Centre for Social and Economic Modelling said.

"The overall impact [of this budget] will fall mostly on the poor": National Centre for Social and Economic Modelling research fellow Ben Phillips.

"The overall impact [of this budget] will fall mostly on the poor": National Centre for Social and Economic Modelling research fellow Ben Phillips. Photo: Richard Briggs

''We look at households’ disposable income at the end of the day and we add on any of the goodies, and we take away all of the things taxpayers are either not getting or will have to pay in tax. And the overall impact [of this budget] will fall mostly on the poor.''

A range of policy experts said that obvious regressive policies in the budget include the changes to Family Tax Benefits Part A and B, the $7 co-payments to visit the GP, the new co-payments for pathology tests and diagnostic imaging tests, and the increase in the pharmaceutical co-payment.

Professor Peter Whiteford from the Australian National University said the biggest regressive policy is the decision to change Family Tax Benefit Part B.

Said the biggest regressive policy is to change Family Tax Benefit Part B: Professor Peter Whiteford.

Said the biggest regressive policy is to change Family Tax Benefit Part B: Professor Peter Whiteford. Photo: Supplied

''If you’re a lone parent with one child, you get $750 and you lose $2200, so you’ll lose about $1500 a year from that,'' Mr Whiteford said. ''When your income is already very low ... that’s fairly regressive.''

The federal government’s proposed $7 co-payment to visit a GP would also hurt the poor more than we realise, economists said.

That is because $7 is worth much more to someone taking home $200 a week than it is to someone taking home $3846 a week (or $200,000 a year).

For example, for those with $200 a week to spend, $7 is 3.5 per cent of their weekly take home pay. For someone taking home $200,000 a year, $7 equals just 0.18 per cent of their weekly pay.

But if those on $200,000 a year were asked to pay 3.5 per cent of their weekly income, like those on $200 a week, they would have to spend $134.60 to visit the doctor, not $7.

Stephen Duckett, the health program director for the Grattan Institute, said new co-payments for pathology tests and diagnostic imaging tests will act as a further deterrent for people on low incomes to visit the doctor.

''These are things that are actually ordered by doctors because they think they need them to make a diagnosis,'' Mr Duckett said. ''So we’re now no longer talking about co-payments to deter unnecessary services or for a price signal on patients. We’re now talking about a price signal when patients aren’t actually making the decision. So it’s a dramatically different proposition.''

The warnings come after economists said this week that the Abbott government’s first budget would increase inequality in Australia if it tried to reduce the deficit by predominantly cutting spending.

The budget papers this week said that 77 per cent of budget savings will be made by cutting government spending.

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75 comments

  • Ridiculous article

    Commenter
    M.
    Date and time
    May 15, 2014, 7:49AM
    • ^ Citation needed.

      Commenter
      Some cheese with your whine?
      Date and time
      May 15, 2014, 8:53AM
    • Well constructed critique. ?.you must've been the school debating champ.

      Commenter
      paff
      Location
      syd
      Date and time
      May 15, 2014, 9:19AM
    • M. Your arguments are very poor mainly because you haven't provided any.

      Commenter
      Good Logic
      Date and time
      May 15, 2014, 9:24AM
    • Ridiculous statement to an article that points out the obvious, this is an attack on the poor the sick and elderly, it clearly dispells what many far right trolls rant about, by saying they spend all their money on fags, grog and the pokies, what isn't written in this article is that $200 has not had the rent taken out of yet, utility bills, food, clothing and travel, so $7 is a big deal to find to go to the doctors.

      Commenter
      lost2
      Date and time
      May 15, 2014, 9:28AM
    • I have been trying to understand right wing psychology.
      This budget is not rational, it's punitive.
      To a right winger, old age, sickness, disability, social disadvantage are all seen as "weakness", a moral defect, deserving of punishment and derision. Similarly, people living in war zones etc.
      They live in a narrow world, an echo chamber of equally out of touch and sanctimonious people, congratulating one another on their moral and financial superiority.
      They are also paranoid, and feeling constantly under threat from the underclass they create.
      Weapons are their security blanket, and too much is never enough.
      MAD - Mutually assured destruction is the endgame in the world of the right wing authoritarian.
      Standing by for the coalition to self destruct, Tony's back benchers, LNP premiers, Clive are Shorten's best allies!

      Commenter
      Stopthelies
      Location
      WA
      Date and time
      May 15, 2014, 10:15AM
    • M, what is ridiculous about this article. When families and individuals are already having to decide to give up a meal to pay the rent or utilities bills these changes only further exacerbate their desperation.

      Commenter
      ICSBSS
      Date and time
      May 15, 2014, 10:37AM
    • Who cares what economists think? Tony sure doesn't. Or scientists, or business leaders, or the IMF, or the CSIRO, or the Reserve bank, or Treasury. Tony simply listens to nobody but the IPA.

      Commenter
      GOV
      Location
      Sydney
      Date and time
      May 15, 2014, 1:45PM
    • i am surprised that people havent seen through the fiscal furphy..the waffle on about budget deficits..

      Commenter
      dieseldoc
      Location
      melb
      Date and time
      May 15, 2014, 3:01PM
    • It is so obvious, if the low paid had simply chosen to be borne by "women of caliber" then they would not be poor.

      Tony doesn't care because the vast majority of the less well of don't vote for him.

      Commenter
      Paul01
      Location
      Riverina
      Date and time
      May 15, 2014, 3:30PM

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