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New leak reveals PM failed to ease the squeeze.

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Wayne Swan MP Shadow Minister for Family and Community Services


In yet another embarrassing Cabinet leak, it has been revealed the Howard Government has sat on a suite of proposals designed to ease the pressure on families squeezed by its flawed family benefits system.

Sensitive Cabinet in Confidence documents reveal measures had been developed in mid 2003 that could reduce the impact of family benefit debts; however, delays, including at the direction of John Howard, held up Cabinet consideration.

Clearly, rather than implement changes to ease the squeeze on families, John Howard instead, wanted to save the measures for a possible election bribe.

To make matters worse, the Cabinet in Confidence documents indicate the decision to sit on the measures was taken despite advice the current system would continue to result in a high number of debts that many families would find impossible to avoid.

The Cabinet in Confidence documents reveal the Government had on the table in mid 2003 a range of possible options to reduce the impact of family payment debts, including:

• Introducing a new end of year cash lump sum ‘tax credit’ delivered to all families, and in the case of those with debts, would help offset overpayments;

• Administrative measures to improve accuracy of income estimates, including substituting estimates based on previous years’ earnings; and,

• Incentives to encourage end of year claims through the tax system.

While hardly original, some of the measures if implemented would be likely to reduce the number and impact of family benefit debts.

In particular the cash lump sum ‘tax credit’ is reminiscent of the Howard Government’s pre 2001 election bribe of a one off $1,000 waiver for every family who had accrued a debt.

For families however, it is a case of once bitten, twice shy. While two thirds of families had their debts wiped by the 2001 election waiver, over 670,000 were slugged with debts averaging $910 in the following year.

After being in office for eight long years, the Howard Government has lost touch with ordinary families. Band-aid fixes on the eve of an election are no substitute for a properly designed family benefit system that doesn’t punish families with fluctuating incomes.

ENDS Sunday 07March 04 Web:

Contact: Wayne Swan on 0418 795 329 Matt Linden on 0407 430 613