The Australian Greens oppose this Bill as it will reduce already
inadequate income support payments and leave income support recipients worse
off and more susceptible to poverty.
The Australian Greens opposed this measure when it was included in the
Social Services Legislation Amendment (Omnibus Savings and Child Care Reform)
The measures in this Bill will affect 1.7 million people by 30 June
The Australian Greens note the concerns raised in the Majority Committee
Report regarding the creation of a two-tiered system, the adequacy and
indexation of income support payments and increasing electricity prices and
impact on their recipients and share these concerns.
Creation of two-tiered system
As the Majority Committee Report outlines, a number of submitters to the
inquiry were concerned that the Bill's proposal to cease the payment of the
Energy Supplement to new income support recipients from 20 September 2017,
while continuing to pay the supplement to those in receipt of it on 19
September 2016 will create a two-tiered system.
The Australian Greens share the concerns of the Australian Council of
Social Service (ACOSS) regarding the impact of a two-tiered system and it
creating further inequity in the income support system.
Individuals in the same circumstances, on the same payment, should receive the
same amount of money. It is not fair that an individual who commenced receiving
a payment on the 20th of September 2016 will no longer receive this supplement
if this Bill passes, but an individual who commenced receiving a payment only a
day earlier will continue to receive the supplement.
It is also contrary to this Government's agenda to introduce further
complexity into the social security system, as the National Social Security
Rights Network (NSSRN) outlined it will.
While the Majority Committee Report says that 'the government considers
it to be a fair and reasonable adjustment to cease providing compensation for
the carbon tax in the form of the energy supplement to new income support
the Australian Greens do not consider it fair or reasonable as it will create a
two-tiered system, where the amount of an individual's payment is dictated by
the date they started receiving the payment.
Unfair reduction to inadequate income support payments
Cutting the Energy Supplement would be a real reduction to the already
insufficient income support payments of millions of people. As the Majority
Committee Report noted a number of submitters expressed concern about the
inadequacy of income support payments to meet the rising costs of living in
The ACOSS report Poverty in Australia 2016 provides an illuminating
statistic in this regard: of those on income support, 36.1% are living below
the poverty line, including 55% of people receiving Newstart Allowance.
For those on Newstart, the introduction of the Energy Supplement was the
first real increase to their payments in over 20 years and the removal of the
payment will result in a cut to the overall payment received. It is crucial
that the Government raises this payment, not find further ways to erode it.
The NSSRN said in its submission:
It is particularly disappointing to yet again see the measure
justified, in part, by the repeal of the carbon tax. This justification has
been repeatedly and comprehensively debunked by experts and in the media. In
short, the repeal of the energy supplement does not simply remove extra
compensation which is no longer needed. It is a real cut to a range of social
security payments which were not fully indexed at the time the supplement was
Further to this, ACOSS said that:
If the Energy Supplement is abolished, Newstart will be lower
than it would have been has there been no compensation for the carbon price
introduced in 2013. This is because when the Energy Supplement was introduced,
regular Consumer Price Index indexation of Newstart was adjusted to account for
the supplement, which was paid to cover the increased costs associated with the
price on carbon. Removing the supplement effectively eats into the base rate of
payment, leaving the payment lower than it would have been had regular
indexation taken place.
While the Majority Committee Report says that '[t]he department informed
the committee that in order to assist income support recipients with rising
energy costs, the Government has provided a one-off Energy Assistance Payment
to a range of income support recipients', it should be noted that the most
vulnerable income support recipients did not receive this payment.
The Australian Greens are particularly concerned that this Bill will
leave vulnerable income support recipients worse off and see them plunged
further into poverty.
Inequity in treatment of carbon price compensation
The Government will continue to compensate people on higher incomes for
the carbon tax through tax benefits while seeking to remove the compensation
for people on income support.
The ACOSS submission says:
The government is inconsistent in its treatment of carbon
price compensation. Tax cuts that were introduced at the same time as the
Energy Supplement to compensate for the carbon price continue. A person on a
taxable income of $60,000 is paying $9.65 per week less in tax as a result of
carbon price compensation by way of tax cuts. In short, people on higher
incomes will continue to be compensated, while people on very low incomes will
not, revealing the gross inequity of this bill, as it targets people with the
The Australian Greens do not support individuals with a greater ability
to pay receiving favourable treatment over vulnerable Australians.
The Australian Greens note the concerns raised by a number of submitters
regarding the increasing price of energy and the challenges that people
receiving income support face in meeting those costs. We also note the
circumstances that may see income support recipients consume more electricity,
such as a disability, and as a consequence see them disproportionately affected
by rising costs. The removal of the Energy Supplement will increase the
financial difficulties associated with meeting these energy costs for those on
This Bill cannot be supported by the Australian Greens. It will drive
people living on already inadequate payments further into poverty.
The Australian Greens recommend that the Senate not pass the
Social Services Legislation Amendment (Ending Carbon Tax Compensation) Bill
Senator Rachel Siewert
Navigation: Previous Page | Contents | Next Page