13 May 2016

Malice or Misunderstanding?

Note: This post has been amended since originally posted to include a table of examples.

One of the measures announced in the Government's 2016 budget was the abolition of 'carbon compensation' payments for those newly claiming a range of welfare payments, including Newstart allowance. Originally referred to as clean energy supplements, but later renamed energy supplements by the Government, they were brought in by Labor to offset the increase in costs caused by the introduction of carbon pricing. The removal of said pricing makes the supplements redundant and so their abolition has a certain logic. However, if the removal goes ahead as announced, the rates of payments for new applicants will actually be less than if compensation for carbon pricing had never been introduced.

As an example, for a person claiming the (usual) lower single Newstart allowance rate, this will mean their payment is not just $8.80 a fortnight less than current recipients (who get to keep the energy supplement), but $3.60 less than it would have been had there been no carbon tinkering. Let that sink in for a moment - in spite of seemingly endless calls for the rate of Newstart allowance to be increased, the Government is proposing to reduce it to less than its pre-carbon price compensation value.