Ideas@TheCentre
Shaking the 2012–13 money tree
New financial years often mark the beginning of new government policies, programs and payments, and 1 July 2012 was no different from previous years in social policy.
The carbon tax is now in effect and so are the accompanying tax changes and extra welfare payments – up to an extra $338 for single pensioners and $510 for couple pensioners every year. Polarised polls aside, millions of pensioners will now receive larger welfare payments because of the carbon tax.
DSP reforms this year are modest compared to previous years. All disability pensioners can now work up to 30 hours a week without losing their payment, assuming of course they don’t make too much money and fail the pension income test. This reform is best understood as part of the broader changes (including DSP participation interviews costing taxpayers $94 each) that came into effect in the last year and made it harder to get on to the DSP but easier to get off it.
On 1 July, the government also gave more than $500 million in $600 lump sum payments to 560,000 carers through the Carer Supplement. Ironically, the Rudd government’s razor gang wanted to slash the payment in 2008 itself (then known as the Carer Bonus); following a pre-budget leak, the government gave the Brendan Nelson led opposition its first political win when Rudd backed down.
In total, the Gillard government will spend more than $20 billion on income support payments for people with disability and carers in 2012–13.
And for the first time ever, income management will apply to people from a non-Indigenous background, with trials in Bankstown (NSW), Greater Shepparton (Vic), Rockhampton (Qld), Logan (Qld), and Playford (SA). These trials aim to tackle long-term intergenerational welfare dependency by ensuring that between 50% and 70% of a participant’s welfare payment is used to pay for life’s basic necessities rather than drugs, alcohol or cigarettes. My colleague Sara Hudson has written more on this subject here.
This week is also National Aboriginal and Islander Day Observance Committee (NAIDOC) Week. The government has funded around 800 NAIDOC week grants worth about $7.4 million since 2009, and another $1.6 million this year. Some public servants get a free day off work to attend the celebrations. As an aside, check out actor Morgan Freeman saying Black History Month is ridiculous.
The hot topics of carbon tax and immigration have pushed social policy reforms under the radar in recent months. But with the Coalition committing to repeal the tax – and the compensation – expect social policy to be front and centre in 2012–13 as the government revs up the mother of all scare campaigns telling every pensioner in the country that they will be worse off without a carbon tax.
Andrew Baker is a Policy Analyst at The Centre for Independent Studies.
