Single parents and single income families will get lower government benefits when their youngest child turns 13 under a revamped families package that abandons many of the cuts proposed in the Abbott government’s 2014 budget in order to get some savings through the Senate.
The treasurer, Scott Morrison, and social services minister, Christian Porter, will unveil new legislation proposing milder changes on Wednesday including;
- ending family tax benefit B for single-income two-parent families when the youngest child turns 13. It now stops at 18, but the 2014 budget proposed that it end at six
- reducing family tax benefit B for single parents and eligible grandparents with children between 13 and 18 to $1,000, from around $3,000 a year
- increasing family tax benefit A by $10 per fortnight while phasing out the current end-of-year supplements
- abandoning the proposed two-year freeze on all family tax benefit payments.
As revealed by Guardian Australia, the new package forgos much of the $6bn in family tax benefit cuts that were announced in the 2014 budget, but remain blocked in the Senate. The government needs at least $3.5bn in savings because it has hypothecated this amount as a way to “pay” for a $3.5bn childcare shake-up that was the centrepiece of this year’s budget. Some of the savings could also come from $1bn in proposed cuts to paid parental leave.
While the childcare changes are not scheduled to start until 2017, they would be harder to spruik in the 2016 election year if the government had failed to secure its self-identified funding stream.
Family tax benefit B is available to families earning up to around $100,000 a year.
Senate crossbenchers are seeking a smorgasbord of sweeteners from the government in return for supporting the revised cuts to family tax benefits for low-income families.
Morrison retained responsibility for the long-running negotiation, which he began as social services minister under Abbott, and has been floating new compromise options with crossbench senators in recent weeks.
The senators have been seeking their own concessions in return.
Tasmanian independent senator Jacqui Lambie has a “wish list” from which she will seek concessions whenever the government needs her vote. It includes demands that the government waive the Tasmanian government’s $200m in public housing debt. Lambie is scheduled to meet the prime minister, Malcolm Turnbull, on Thursday.
In talks with independent senator Nick Xenophon and other crossbenchers, innovation minister Christopher Pyne linked support for the package to an additional $200m in assistance for car component makers to help companies cope when the car industry closes in 2017.
Senators Ricky Muir and John Madigan refused to link the two policies, but Xenophon did not reject the idea, telling Guardian Australia: “In my view if you can stem the tsunami of job losses coming from the closure of the automotive industry, that would have a big impact on the number of families on welfare, and that’s a good thing.”
Family First senator Bob Day has made his support contingent on the government “starting a discussion” about income splitting.
Queensland senator Glenn Lazarus wants some payments to grandparents who look after children and the government has also offered to pay an additional $1,000 a year to stay-at-home parents with a child under one, a concession that was also promised as part of Turnbull’s coalition agreement with the National party.
On Tuesday the government presented a new package of cuts to Coalition MPs and senators – indicating it believes a deal with crossbench senators is imminent. Turnbull told parliament the revised package would “strike a balance between achieving significant savings while still providing sufficient financial support to those families most in need”.
It is understood the plan will be released on Wednesday.
