The shadow finance minister, Jim Chalmers, has said Labor will honour its pre-election promise to pass $6.5bn of budget cuts, despite internal calls to save the energy supplement to welfare recipients.
On Monday night the finance minister, Mathias Cormann, challenged Labor to back the savings in the government’s omnibus bill, describing it as the “absolute minimum starting position” for budget negotiations.
“Will Bill Shorten step up to the plate on budget repair in this parliament?” Cormann asked in a speech at the Sydney Institute. “Or will [Shorten] be like jelly on that plate – the wibble-wobble wibble-wobble jelly on a plate, first opposing, then supporting, then not knowing what to do.”
On Monday senior Labor figures launched a rearguard action to save the energy supplement, worth $1.4bn over four years.
The supplement was introduced in 2013 to compensate welfare recipients for the carbon tax. Axing it would affect an estimated 2.2 million people, including pensioners and people on unemployment benefits.
Asked about Labor’s budget position on ABC radio on Tuesday, Chalmers said: “The position we take in the parliament will reflect the position we took to the people in the election.”
He said it was “entirely reasonable” to wait for the detail of the proposed omnibus bill to make sure it matched Labor’s commitment before the election.
“The government has a less than a stellar record when it comes to accurately reflecting Labor’s views on these sorts of things,” he said. “Our final position will be consistent with what we took to the people.”
Welfare groups wrote to the government and opposition on Friday, pleading with them not to cut the energy supplement.
Estimates from the welfare sector say the supplement is worth $4.40 a week for single unemployed people and $7.05 a week for a single person on the aged or disability pension. Labor initially opposed the cut on equity grounds but backed the saving during the election campaign.
Chalmers said Labor cared deeply about the wellbeing of welfare recipients and the views of the Australian Council of Social Services. But he said reductions to Newstart payments “have to be balanced against budget repair” and the goal of avoiding a downgrade to the triple A credit rating.
.@kieran_gilbert on that #wibblewobble comment by @MathiasCormann #AMAgenda https://t.co/Xh26XeorgQ
— Sky News Australia (@SkyNewsAust) August 23, 2016
In Monday night’s speech Cormann said the $6.5bn of measures in the government’s omnibus bill were the same measures Labor backed during the campaign. He said Labor’s attitude to budget repair mattered as once again the government lacked the numbers to pass disputed legislation through the Senate.
He said the government should be able to accept as read the bipartisan pre-election commitment to implement $6.5bn in savings. “In fact that should only be the absolute minimum starting position.”
Cormann said more than 800 policy decisions on spending since 2013 had already produced a $221bn net improvement in the budget out to 2026-27, with $26bn net savings in the current forward estimates and a further $195bn from 2020-21 to 2026-27.
A return to surplus of about 0.2% of GDP was projected for 2020-21, he said, with the budget remaining in surplus to 2026-27.
Chalmers said Cormann was “obsessing about Labor’s positions” on budget savings before getting its own house in order. He criticised the government for “rewriting their position on superannuation”, a reference to consultations by the treasurer, Scott Morrison, to appease a restive backbench rebelling against proposed changes to make the superannuation system less generous as a tax-minimisation strategy.
Asked about Labor’s position on super changes, Chalmers said: “It’s a bit hard to respond to daily thought bubbles from George Christensen and others.” He said Labor was concerned about the retrospectivity of the lifetime cap on non-concessional superannuation contributions.
Coalition backbenchers now reportedly prefer an increase to the $500,000 lifetime cap to $750,000 to address their concerns, rather than bringing forward the start date of the cap from 2007 to the present.
