Senior Labor figures have launched a fresh attempt before the resumption of federal parliament next week to preserve a welfare supplement the opposition agreed to scrap during the election campaign to help bolster its bottom line.
While well-placed sources said on Monday it was unlikely Labor would switch course on the energy supplement – which is a savings measure worth nearly $1.4bn over four years – a rearguard action against the decision was ventilated at a Labor leadership group strategy meeting.
Labor’s internal nervousness about the measure follows a coordinated campaign by welfare and community groups to preserve the energy supplement, a payment introduced as compensation for the carbon pricing scheme introduced by the Gillard government.
Scrapping the supplement will affect an estimated 2.2 million people, including pensioners and people on unemployment benefits.
The cuts apply to new recipients and the impact varies according to the level of the benefit. Estimates from the welfare sector say the value of the cut is $4.40 a week for single unemployed people and $7.05 a week for a single person on the aged or disability pension.
The Coalition has moved to cut the carbon pricing compensation for new benefit recipients on the basis that the carbon price was repealed by the Abbott government.
In the budget, unveiled just before the election campaign, the treasurer, Scott Morrison, said the Coalition would not fund “carbon tax compensation for a carbon tax that doesn’t exist”.
Labor was initially critical of the Coalition’s decision on equity grounds but the opposition went on to accept the saving.
The proposed cut will be presented to parliament in an omnibus bill the government intends to pursue once parliament resumesas a downpayment on the task of fiscal repair.
But welfare groups object to the cut on the basis that it affects people already living below the poverty line.
A coalition of organisations including the Australian Council of Social Service and the National Welfare Rights Network have written to Malcolm Turnbull and Bill Shorten calling for the planned cut to be reversed.
