News

Energy payment plan would cut support for 2.2 million of Australia's poor, Anglicare warns

Cutting the Energy Supplement payment to the poor would be 'unconscionable' as costs soar, Anglicare Australia says

Anglicare Australia's submission says: "We believe that denying the Energy Supplement to new recipients, in the same circumstances, and facing the same energy and cost-of-living pressures as existing recipients, would be unfair.''

By Mark Brolly

July 19 2017 

Anglicare Australia has warned that a Federal Government plan to phase-out the Energy Supplement would cut income support payments for an estimated 2.2 million people.

The acting Executive Director of Anglicare Australia, Mr Roland Manderson, said abolishing the Energy Supplement would cut income support payments to some of the poorest Australians by up to $7 a week.

“Australia already has some of the lowest income support payments in the world,” Mr Manderson said.

“Any cuts will hurt people who rely on income support, and who are already living well below the poverty line.”

Anglicare Australia has made a submission to the Senate Standing Committee on Community Affairs opposing the abolition of the payment. The proposal is contained in the Social Services Legislation Amendment (Ending Carbon Tax Compensation) Bill 2017, into which the Senate committee is inquiring.

Mr Manderson said the Energy Supplement was the first real increase to Newstart and Youth Allowance payments since 1994 and rejected the Government’s explanation that this was a proposal to end carbon tax compensation.

“At a time when cost-of-living and energy costs are soaring, this cut would be unconscionable,” he said.

“This payment was actually introduced in place of scheduled increases to the payments themselves. The name of a Bill doesn’t always tell you what it does. We should call this proposal what it is – another attempt to cut income support.

“The Senate Inquiry looking at this already has plenty of evidence that people can’t afford these cuts. Anglicare Australia is just one of many groups that have overwhelmingly rejected them.

“Let’s abandon these cuts and work together to design a payment system that meets everybody’s needs.”

Anglicare Australia’s submission said those affected included people on the age and disability support pensions as well as recipients of care payments, family payments, parenting payments, Newstart and the Youth Allowance.

“The evidence that these payments are already too low is almost universally accepted, and the business and community sectors have been calling for an increase for years,” the submission said. “The value of these payments has eroded over time, as they have failed to keep up with wage growth and cost-of-living increases. The base rates of several income support payments, including the Newstart Allowance, have not been increased in nearly 25 years. Australia now has the second lowest unemployment benefit in relation to average wages in the OECD. The OECD itself has reported that Australia’s income support payments are insupportably low.

“To further reduce the level of inadequate income support goes against almost unanimous calls for an urgent and immediate increase to income support payments.”

Anglicare Australia noted in its submission that the legislation would only apply to new income support recipients from 20 September 2017. “This is in spite of the fact that all income support recipients are facing the same energy and cost-of-living pressures,” the submission said.

“Wholesale electricity prices are higher now than in 2013, when the carbon tax was in place. The University of Melbourne recently found that the average electricity price across Australia nearly doubled last summer, compared with the two summers that the carbon tax was operating. Coupled with large tariff increases in states and territories and a doubling of gas prices, energy costs are predicted to continue rising. Relief for these costs should be offered equally to new and existing income support recipients.

“We believe that denying the Energy Supplement to new recipients, in the same circumstances, and facing the same energy and cost-of-living pressures as existing recipients, would be unfair. Anglicare Australia therefore recommends that the Energy Supplement should continue to be paid to all income support recipients.”

The Senate referred the Bill to its Community Affairs Standing Committee for inquiry and report on 15 June. The Committee is to report its findings on 9 August.

Other submissions have been made by organisations including Carers Australia, Catholic Social Services Australia, COTA (Council on the Ageing) Australia, Foodbank Australia, the Australian Council of Trade Unions, People with Disability Australia and the St Vincent de Paul Society.

A public hearing on the Bill is to be held at Melbourne’s Parliament House on 26 July.

The Minister for Social Services, Mr Christian Porter, announced on 31 May that the Government was reintroducing legislation to end compensation for Labor’s defunct Carbon Tax by closing the Energy Supplement to new welfare recipients.

“The Energy Supplement was introduced under Labor to compensate for the introduction of the Carbon Tax – a tax scrapped by the Coalition in 2014,” Mr Porter said.

“The Turnbull Government is committed to ensuring Australia’s welfare system provides appropriate support to those in need, while remaining sustainable for future generations.

“It is simply not sustainable to continue to compensate people who have not yet even entered the welfare system for a tax that no longer exists.”

Mr Porter said the measure, if passed, was expected to save $933 million over four years.

He said that the principle of closing the supplement to future income support recipients had already been endorsed by Parliament.

“Under the Budget Savings (Omnibus) Act 2016, the supplement has already been closed to new recipients of Family Tax Benefit A and B as well as holders of the Commonwealth Seniors Health Card from 20 March 2017,” Mr Porter said.

Anglicare Australia is a network of 36 independent organisations linked to the Anglican Church that provide services to one in 26 Australians. More than 13,000 Anglicare staff and 9000 volunteers work with more 940,000 vulnerable Australians annually across the country.