Business

Government quietly dumps controversial 'zombie' welfare cuts

Parents, mums-to-be and nurses take part in a union-led rally against changes to paid parental leave in 2015. Source: AAP

A suite of controversial savings measures from Tony Abbott's 2014 budget has been removed from the parliamentary agenda, including cuts to paid parental leave and family tax benefits.

The federal government has removed a suite of ‘zombie’ savings measures stemming from highly unpopular Tony Abbott's 2014 budget. 

Social Services Minister Christian Porter on Wednesday scrapped plans to save about $13 billion by cutting Family Tax Benefits, stopping women from ‘double-dipping’ by receiving both government and employer paid parental leave, and increasing co-payments and changing the safety net for the Pharmaceutical Benefits Scheme.

By 2019-2020, it was projected the Family Tax Benefits cuts would save the budget $6.3 billion and stopping the so-called ‘double dipping’ would save another $1.3 billion.

Catholic Social Services Australia chief executive, Father Frank Brennan, welcomed the government's reversal.

“Plan A was the zombie measures of 2014, we’re delighted the government has abandoned those measures, and we thank the Senate for that,” he told reporters in Canberra on Wednesday.

The government had struggled to get the measures through the senate due to a lack of support from Labor and key crossbenchers. 

But what's the future of the services that were flagged for cuts?

Family Tax Benefits

A spokesperson from the Department of Social Services told SBS World News from July 1, 2017 Family Tax Benefits rates would be maintained for two years.

From July 1, 2018 changes to the maximum rate of Family Tax Benefits Part A will include an income test.

The new maximum rate income test will apply a 30 cent-per-dollar reduction (up from 20 cents per dollar) for every dollar a family earns above the higher income free benchmark of $94,316.

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Additionally, from July 1, 2018 fortnightly Family Tax Benefits Part A payments will be reduced by about $28 per fortnight for each child who does not meet the immunisation requirements.

Decreasing fortnightly payments, rather than withholding the supplement at the end of the year as occurs at present, is intended to serve as yet another reminder for parents to keep their children’s immunisation requirements up to date.

Paid Parental Leave Scheme

The government will not proceed with controversial changes to the Paid Parental Leave Scheme.

Former treasurer Joe Hockey had introduced the measures in a bid to stop parents, mainly mothers, claiming the government's 18 week scheme in addition to any employer-provided scheme - something he termed 'double-dipping'.

“Parents will continue to have access to 18 weeks Parental Leave Pay, as well as any entitlement to maternity leave from their employer,” the spokesperson said.

Newstart allowance

The government will not proceed with the unlegislated parts of measures reported prior to the 2016-17 budget.

This includes the increase to the age of eligibility for the Newstart Allowance and Sickness Allowance, previously announced in the 2014-15 budget, and the four week waiting period for youth income support, previously announced in the 2015-16 budget.

- with AAP

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