Senior academics have accused the Abbott government of “shooting the messenger” when it attacked modelling that found the budget hit poorest families the hardest, and have produced a new analysis “broadly confirming” the earlier conclusions.
Professor Peter Whiteford and Daniel Nethery from the Australian National University said on Monday their analysis “broadly agreed” with modelling from the National Centre for Social and Economic Modelling (Natsem) released last week.
The academics, from the Crawford School of public policy, looked at the impact of the family tax benefit changes on single income and two income families. In both cases the hardest hit were families not in the workforce with oldest children, who the government wants to see resume paid work.
But some working families with younger children also lost significant amounts - single and dual income families with a three year old, and earning $40,000 a year were almost $10 a week worse off, and earning $60,000 were more than $20 a week behind. On the same income brackets families with two small children, aged 3 and 6, were worse off by a larger margin each week.
In its modelling, Natsem found families with incomes of up to $47,000 with children will lose 7.1% of total disposable income by 2018-19 while the most well off families, with incomes of $119,000 and over, will be slightly ahead.
But last week the prime minister rejected Natsem’s work out of hand because it did not include the so-called “second-round” or flow-on effects of the government’s policies, for example their intention of getting more Australians into the workforce.
Tony Abbott said this omission meant the modelling was “a fraudulent misrepresentation” of the government’s budget because returning people to work was “the whole point of the policy measures”. He said the Labor party had “used and abused” the modelling firm for political purposes, after Labor initially released only some of the Natsem findings.
But in an article on the Conversation website, the ANU academics say it is “highly unlikely” that any positive second round effects “will offset the losses in disposable income experienced by many families with children” – and suggest the government was “shooting the messenger” because Natsem had reached a conclusion the coalition did not like.
“Governments should welcome the type of evidence-based policy analysis exemplified by Natsem’s analysis, and idelly provide it themselves. It focuses the debate on concrete questions of how policy changes affect people’s lives. To criticise the straightforward modelling approach because it yields the ‘wrong’ answer smacks of shooting the messenger,” they wrote.
The academics said the new childcare package – a centrepiece of the budget – was progressive and increased assistance for low and middle income families the most. They did not look at the net effect of the new childcare assistance and the family tax benefit cuts, as Natsem did.
But they said looking at the overall cost of the packages on childcare assistance and family tax cuts, it became clear “the total volume of assistance for families is going down.”
“To assess the overall household impact of the budget, it is necessary to balance who wins from the generally progressive child care assistance proposals versus who loses from last year’s and the new savings proposals,” they said.
