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Labor supports family tax benefits freeze

Stepping up the pressure on the Abbott government: Opposition Leader Bill Shorten.

Stepping up the pressure on the Abbott government: Opposition Leader Bill Shorten. Photo: Alex Ellinghausen

Labor will wave through controversial family welfare changes to freeze the rate of family tax benefits for two years, saving the budget $750 million per year in perpetuity and reducing further the list of no-go items identified in the first Coalition budget.

Sources in the opposition said the ALP was aware it could not be seen to be overly negative and that, in government, it too had ''paused'' increases to family payments.

The news is a welcome development for the Abbott government whose tough ''contribute and build'' budget has backfired, sending its public stocks plummeting and emboldening Labor, the Greens and the independents to block several elements seen as breaches of faith.

Prime Minister Tony Abbott is known to regard the public clamour for backdowns and concessions from the government as premature given that most savings measures have not even been written into legislation or introduced into the Parliament.

His senior ministerial group is urging waverers to hold their nerve and not be intimidated into accepting changes to initiatives before they are before the House or Senate.

The expected movement on family payments comes on top of Labor's other big concession, which is to simultaneously criticise the 2 per cent temporary deficit levy as a tax increase, and a broken promise, while letting it become law.

That will net the government another $3.1 billion in three years.

However, billions of dollars in budget measures face an uncertain future.

A report by Fairfax Media at the weekend revealed the government was realistic about negotiating some measures. Education Minister Christopher Pyne signalled a willingness to be flexible and ''respectful'' of opposition and crossbench senators.

Opposition Leader Bill Shorten stepped up his pressure on the government over the budget, taunting Liberal and particularly Nationals MPs in potentially hard-hit regional areas to speak out for the sake of their constituents.

''Today, Labor is asking all those Coalition members of Parliament - don't be brave in the privacy of your own room where no one can hear you speak,'' he said. ''There's millions of Australians who want you to tell the Prime Minister how dreadfully unfair his budget is.''

In Parliament, a defiant Mr Abbott continued to defend the budget as fair and based on the concept of spreading the burden, noting the tax increases on higher earners and the freeze on parliamentary salaries.

Privately, Liberals are taking some comfort from the fact that, despite the tide of negative opinion, the overwhelming majority of the budget will pass unscathed and the list of measures opposed by ''outraged'' Labor and Greens MPs is being whittled back.

Despite rumours of friction in the Greens over the proposed return of twice-yearly petrol indexation, the Greens look set to pass the fuel tax increase, raising more than $2 billion over the next four years.

Labor has slammed that as a cost for families in the outer suburbs that will go ''up and up and up'', reprising a favourite taunt of Mr Abbott's about the carbon tax.

The $7 GP payment continues to attract some of the most spirited opposition. The government signalled it was not prepared to give ground on the amount. However, insiders say it is possible it might be adjusted to exclude minors and pensioners.

Budget measures — likely failures and successes

$7 GP co-payment: In doubt and unlikely to survive.

Return of petrol excise indexation:  Likely to pass with Greens backing.

Scaled-back paid parental leave:  Status unknown — not given its own budget line.

Family Tax Benefits (B) tightening of eligibility for children:  Opposed.

Freeze of  Family Tax Benefits maximum payments for two years: Will pass with Labor backing.

Two per cent deficit levy for three years: Will pass with Labor backing.

Change to pension age to 70 by 2035: To be blocked.

Lower indexation rates for a slew of pensions: To be blocked.

Tightened rules for Newstart: To be blocked.

University changes to make fees higher and to make student loans more expensive: Status unknown

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84 comments

  • "Too negative" - Labor should be wary not to be seen as "just the same as the LNP".

    Commenter
    Martin
    Date and time
    May 27, 2014, 8:35AM
    • The problem for Abbott is that the narrative is firmly planted in the mind of the electorate and it will make little difference what Labor does. And this is the narrative: flagrant broken promises, hypocrisy and attacking the most vulnerable. The people feel betrayed like never before. Doesn't matter what Labor does with regard to this because Abbott and the party he has sacrificed on the altar of his ego and ineptitude are damaged goods.

      Commenter
      Pancho
      Date and time
      May 27, 2014, 9:03AM
    • I suggested HQ at my party PUP record the ALP saying they will block all but one budget measure as I predicted they will backflip from that lie, and yesterday in parliament I watched Bill and Tania abuse Tony for freezing these payments by saying how bad and wrong it is, and bugger me dead, here they are today, without conscience or credibility, saying they agree to take this money off families, meaning they made a backdoor deal. Lying in Govt is at its worst ever and as a PUP member, it makes me sick. Politics must have credibility within it, and these lies are tarnishing me even if indirectly. Late yesterday deputy ALP leader Tania appears on my facebook not as one in my friend list somehow, and touted how they are against this freeze, I commented back saying the ALP cant be trusted and are starting to pass most of Abbott's budget after saying they will block it, being a grab to save power of duopoly. I was again right, and more to come.

      Commenter
      Brian Woods
      Location
      Glenroy
      Date and time
      May 27, 2014, 9:26AM
    • The budget is starting to look more reasonable. The fuel excise indexation is sensible and will likely be passed, deficit levy is reasonable and will be passed, freeze on Family Tax Benefits will be passed. Despite support within the Labor party, the GP co-payment probably won't be supported. The LNP is hardly going to continue to push for the pension age to be increased when it doesn't take effect until 2035. Hopefully the PPL will be ditched, along with the newstart changes. If the above eventuates then I believe public support can only increase for the budget, given the hysterical commentary to date. The next few months will be very interesting.

      Commenter
      Flanders
      Date and time
      May 27, 2014, 9:26AM
    • What a refreshing change to the lugubrious clanging negativity of the last opposition. ALP - better in government, better in opposition - showing the LNP up as ham-fisted ideologues

      Commenter
      rod steiger
      Location
      toukley
      Date and time
      May 27, 2014, 9:33AM
    • Labor appear to be showing some responsibility here. A freeze on benefit amount means people will have to make a gradual adjustment rather than the shock of sudden reduction.
      It's almost as if Labor has finally realised how to actually govern, now that they are in opposition and don't have to pander to interest groups.

      Commenter
      Scotty
      Date and time
      May 27, 2014, 9:34AM
    • Pancho.....I think Clives got a real chance here if he plays it right.

      Shorten is treading water here, appears to want to take pensioners supplements off them, which is worth at least $800 a year to them, as well as freezing family payments, and still no clear understanding on if he wants to privatise unis?........both these major parties appear to have some of the same lobbyst backers, so what can we expect I guess............the libs appear to be the biggest fibbers since the second happening, no-one can believe anything they say, while they line up expensive lunches with some very dodgy funderraisers and keep lining their pockets, while making the poor poorer......they're just about to crash auss into oblivion it appears, and couldn't give a stuff...

      Commenter
      Shelby
      Date and time
      May 27, 2014, 9:48AM
    • @ Flanders May 27, 2014, 9:26AM

      Realpolitik may well dictate that some, maybe even enough of Hockey's budget proposals will get through to allow the budget to eventually pass.

      What will remain, however, is the mass of broken promises, back-sliding and memories of the cons attempts to do over the vulnerable.

      The 'unity ticket' of Gonski is now permanently wrecked, the NDIS will never come about under Abbot's lie-a-minute mob, ripping out of uni places funding to fund essentially trade qualifications will not be forgiven, the combined assault on education and health to the tune of $80B will always be remembered, the introduction of doctor co-payments not to fund the medicare system or to bring down the deficit, and the list is almost unending.

      The most telling factor is it has become glaringly obvious to Blind Freddie that the 'budget emergency' etc. etc. was an enormous lie; the cons have made NO structural moves to lower either, just mainly letting them recede naturally with bracket creep and increased economic activity.

      No, while thius budget may pass with adjustments, the voters won't forget at the next election; bring it on!

      Commenter
      BillR
      Date and time
      May 27, 2014, 10:05AM
    • Scotty - most of the budget measures are staggered to minimise adverse impacts to the economy.

      Commenter
      Flanders
      Date and time
      May 27, 2014, 10:05AM
    • This budget can hardly be called reasonable. 'Failure' would be a better characterisation which in the end due to its politcal unacceptability will make Australia's fiscal position far worse than it ever needed to be. Any budget that exacerbates the problems it purports to address needs to be recognised for the disaster it is.

      No doubt the Government will continue to point the finger and tediously attempt to blame Labor for all the results of their own political ineptitude. Labor after all was on track for a surplus in 2016-17. On the other hand there are signs that Abbott and Hockey have destroyed consumer confidence and have brought the country to the brink of recession. In the end I can't understand how Flanders is beginning to sound so much like Hacka.

      Commenter
      GOV
      Location
      SYdney
      Date and time
      May 27, 2014, 10:06AM

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