Grattan / Government gets a deal for $6.3 billion in savings to pass parliament

michelle grattan

A GOVERNMENT-Labor deal will see the passage of A$6.3 billion in savings over the forward estimates in the Coalition’s omnibus bill. Its passage would be the first major legislative achievement of the re-elected Turnbull government.

In the “across the aisle” agreement, Labor preserved the energy supplement for most new recipients and secured $800 million over five years for the Australian Renewable Energy Agency (ARENA).

The government has agreed to drop its planned reinstatement of the baby bonus – a policy to which the Nationals have been particularly committed. This will save $367 million over the forward estimates.

It has also removed from the omnibus bill proposed changes to Labor’s child dental benefits scheme, and has dropped cuts that would have affected people with severe psychiatric conditions.

To compensate for funds lost by the changes it extracted, Labor has agreed to the abolition of the Family Tax Benefit-A supplement for families with adjusted taxable incomes of more than $80,000. The saving from this measures is nearly $1.7 billion over the forward estimates.

The deal yields more in overall savings than the original bill, which had a total of just under $6 billion. Labor agreed with 20 of the 24 measures put forward by the government in the bill.

The May budget scrapped the clean energy supplement – which originally was compensation for the now-abolished carbon tax – for new welfare recipients. Under the compromise, all existing categories of recipients, including people on Newstart and pensioners, would continue to get the supplement, except for new recipients of Family Tax Benefit and Commonwealth Seniors Health Card holders.

Although the opposition “banked” the energy supplement budget savings before the election, the cut especially worried the Labor left, with frontbencher Anthony Albanese publicly expressing his concern.

Bill Shorten, flanked by his economic team, Shadow Treasurer Chris Bowen and finance spokesman Jim Chalmers, was first out of the blocks to announce the detailed changes, with Malcolm Turnbull’s news conference following. In the negotiations, Labor insisted they should make the announcement.

Shorten said: “Today is a win for families on low incomes, today is a win for Australians committed to real action on climate change.

“We have protected families on low incomes, we have saved ARENA … from the climate sceptics. We’ve protected the children’s dental program and also we’ve forced the government to capitulate on one of their signature policies, the discredited baby bonus scheme.”

Turnbull said: “There’s a lot more work to be done but this demonstrates that we are delivering on our economic plan, we are delivering on our commitment to bring the budget back into balance.”

It showed that “with good will and good faith, working across the aisle we can deliver results”.

Treasurer Scott Morrison said there is “so much more that needs to be done”.

“I think what this demonstrates to the ratings agencies is that the government in this 45th parliament can get savings through the parliament. That’s a very good story for me to be able to take to New York to the ratings agencies and I will be doing that in the course of the next month. But we cannot rest just on this.”

The omnibus bill is already in the parliament and will be amended by the government to reflect the deal.

The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

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One Response to “Grattan / Government gets a deal for $6.3 billion in savings to pass parliament”

  1. Florence nee Fedup
    September 14, 2016 at 11:50 am #

    On 16/9 Coalition been in power three years. They could have achieved what they did this week back in 2014. Three wasted years.

    Parliament now working as it should. Each MP has one equal vote. Legislation being passed as per constitution, not winner takes all.

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