The Coalition and Labor have struck a compromise deal on the government’s mammoth $6bn omnibus savings bill in a significant step forward for the Turnbull government’s budget repair task.
But Labor has been accused by parents groups of caving on its principles, and criticised by some in the pro-renewable sector for supporting cuts to the Australian Renewable Energy Agency (Arena).
The compromise deal, announced on Tuesday, will see the Turnbull government save $6.3bn over four years.
The government has agreed to drop its controversial plan to cut the clean energy supplement for welfare recipients, worth $4.40 a week for Newstart recipients and $7.05 a week for those on the age pension or disability support pension.
It has also agreed to scrap its planned $1.4bn “baby bonus” which would have given eligible families with a child under one year of age an increase in their family tax benefit part B payment worth $1,000 a year.
The Coalition has also agreed to drop from the omnibus bill its plan to scrap the child dental benefits scheme, introduced by the former Labor government, as well as the plan to cut social security payments to people in psychiatric confinement who have been charged with a serious offence.
The Coalition and Labor are both hailing the deal. Bill Shorten claimed he had made budget repair fairer by protecting pensioners, single parents, carers and people with disability.
“We are pleased Mr Turnbull has agreed to our plan to abolish the government’s baby bonus – it was wrong for the government to lecture Australians about the need for spending cuts whilst indulging the National party with a new baby bonus,” Shorten said.
But Labor has been criticised by some in the pro-renewable sector for agreeing to cut $500m from the Australian Renewable Energy Agency (Arena), leaving it with just $800m to continue offering grants over the next five years, down from $1.3bn.
It has also been criticised by parents groups for agreeing to limit access to the family tax benefit-A supplement for families with adjusted taxable incomes below $80,000.
Jo Briskey, executive director of The Parenthood, said: “This is a significant blow for parents who were relying on Labor to block any cuts to family tax benefit payments.”
Malcolm Turnbull said it was the first of “many successful negotiations” with the opposition that would restore the country’s finances.
“With good will and good faith, working across the aisle, we can deliver results in this parliament,” he said.
Overall, Labor has agreed to support 20 of 24 measures contained in the government’s omnibus bill. It looks likely to pass parliament because the Turnbull government’s cabinet and Coalition party room have supported the amendments.
As part of the deal:
- The government’s $1.4bn “baby bonus” payment will be scrapped.
- The Coalition has agreed to drop from the omnibus bill its plan to scrap the child dental benefits scheme. It still wants to scrap the scheme, but it will do so with separate legislation.
- The Coalition and Labor have agreed to cut funding to Arena, though not by as much as the Coalition had wanted.
- They have both agreed to add a new schedule which limits access to the family tax benefit part A end of year supplement to families earning less than $80,000 per year.
- All existing categories of recipients (including those on Newstart and pensioners) will continue to receive the energy supplement, except for new recipients of family tax benefit part A, family tax benefit part B and the commonwealth seniors health card.
Turnbull last month claimed the new parliament would be a test of Australia’s political system to make the right calls “on the nation’s behalf”.
He asked the opposition to support an “omnibus” savings bill that pulled together all of the Coalition’s savings measures that Labor said it would support during the election campaign.
His attempt to seize the economic agenda on the first business day of the new parliament was then undermined when his government was forced to correct a $107m error in the bill.
Labor has also said it would not be forced into supporting the bill without due consideration.
Adam Bandt, the Greens climate and energy spokesperson, criticised Labor on Tuesday for supporting cuts to Arena.
“Labor’s deal to cut half a billion dollars from clean energy has exposed them as clean energy charlatans,” Bandt said.
“Labor had absolutely no reason to cut half a billion dollars out of Arena. If Bill Shorten had joined with the Greens and the crossbench, we could have stared the Coalition down and found fairer places to raise revenue.”
