Prime Minister Malcolm Turnbull said on Wednesday the energy supplement paid to pensioners and other welfare recipients has been spared the chopping block.
The fortnightly payments, long a measure that some Coalition Government members have wanted to scrap, are worth $14.10 (about $366 a year) if you are single or $10.60 (about $275 a year) each if you are partnered.
The announcement came on the same day that the Senate conclusively rejected the Coalition’s package of tax cuts to big business, theoretically giving the Government more wriggle room to avoid scrimping on welfare in a bid to make up any future revenue shortfall from corporate Australia.
Removing the supplement was expected to produce savings for the Government of $933.4 million from 2016–17 to 2019–20.
AAP reported on Tuesday that the Government was contemplating axing the supplement, a move seen as countering the Opposition’s own refusal to drop the payment.
Less than 24 hours later, Mr Turnbull confirmed that the top-up to help welfare recipients pay for their electricity and gas bills would stay.
The so-called zombie measure to dump the payment originated in the May 2016 Budget but failed to get enough votes to pass into legislation.
Australian Council of Social Service chief executive Dr Cassandra Goldie said the threat of cutting the energy supplement since 2016 had caused anxiety in the community as people on Newstart, Youth Allowance and related payments struggle to afford electricity, food and housing.
“The Prime Minister’s announcement to retain the energy supplement is an important recognition that people on the lowest incomes in Australia are doing it the toughest,” Dr Goldie said.
“We also thank the Senate today for listening to the voices of the community and strongly opposing the company tax cut bill which would have cost the budget billions and put further pressure on essential services upon which we all rely.
“Today is an important opportunity for the Government to reset its agenda with the Australian community.”
The energy supplement was introduced by the Julia Gillard Government in 2013 to help low-income households offset the carbon tax.
When the Abbott Government killed off the carbon tax the following year, several Coalition MPs argued there was no longer any reason to continue paying the offset.
Last year, then Social Services Minister Christian Porter told Parliament that the Government “does not consider it appropriate to continue to compensate people for a tax that no longer exists”.
However, in the years since the tax was unravelled, power prices have continued to climb to the point where Australians now pay the highest price in the world for electricity. Research shows that in most capital cities, power prices have almost doubled in the past 10 years.
On Wednesday, Mr Turnbull said it had become “absolutely clear” the Government would not continue to pursue the change to energy payments.
“With the issue of energy prices being so prominent, we will not move to repeal the energy supplement,’’ The Australian reported the Prime Minister as saying.
He added the decision was not a rash one and the policy shift would not have a negative impact on the Budget.
The backflip comes as the Mr Turnbull’s hallmark National Energy Guarantee (NEG) policy has been stripped of mechanisms to help meet carbon emissions targets. The paring back of the energy policy now has a supposed emphasis on delivering lower electricity prices, in a nod to conservative backbenchers who still believe that coal-fired power stations produce cheap fuel.
Would you be able to pay your power bills if your energy supplement was axed? What do you make of all the flip-flopping on energy policy?