Expert Opinion Panel
Jason Bryce – Business & Finance Specialist
Single Parent budgeting
Budget 2019 – what single parents need to know
What is in Budget 2019 for single parents?
Everything single mums need to know about how Josh Frydenburg’s 2019 budget will impact you and your family.
By Jason Bryce
There are 959,000 single parent families with children in Australia (according to last Census in 2016) but they didn’t rate a mention in Josh Frydenberg’s 2019 budget speech.
That’s despite single parent families having to survive on about half the median income ($974 per week) of other families ($1734 per week).
Is it because 82 per cent of single parents are women? Or is it because single parent families don’t fit with the government’s preferred family type?
Whatever the reason, Josh Frydenberg’s budget forgets many people doing it tough in Australia, while handing thousands of dollars to high income earners.
The National Council for Single Mothers and their Children had submitted a long wish list of reforms to support single mums but that has been totally ignored.
“It’s very disappointing that the government has gone with big tax cuts for high income earners and nothing for those in desperate need,” said Terese Edwards.
“This government told us to tighten our belt, and they are spending up big.”
“Thirty two per cent of children in single parent families are now living in poverty but we didn’t get a mention
But it’s not all bad news. So let’s start with some goodies for single mums in budget 2019:
$330 million in funding for domestic violence services. This has been announced a couple of times now. But for parents escaping violence at home, it can’t be rolled out fast enough.
“Money worries can contribute to women staying or going back to abusers,” said Terese Edwards.
Income tax cuts
The government’s enormous ($158 billion) tax cuts will put some extra cash in your pocket – Employed parents paying PAYG tax on incomes of about $50,000 can expect to enjoy an extra $23 per week from budget tax cuts, according to the Australian Council of Social Services. The downside is that the great cost will surely put pressure on governments to cut services down the track says Dr Cassandra Goldie from ACOSS and they don’t benefit people on the lowest incomes because they don’t pay tax. In contrast a family with income of $200,000 will pocket $11,400 from these tax cuts per year.
To explain the tax cuts simply, the middle tax rate is now 32 per cent and applies to income over $37,000, up to $87,000. That 32 per cent rate will fall to 30 per cent, in five years time in 2024-25. However, the upper limit for that rate will also rise from $87,000 to $180,000, giving a lot of high income earners a big tax cut.
Parents on Parenting Payment (Single) will get a $75 one off payment to help with winter power bills and this might be extended to parents on Newstart, but nothing has been passed by parliament yet.
Carers and the disabled get recognition, but NDIS savings booked in
Young carers will benefit from $80 million worth of new support services and a Royal Commission will investigate disabled care, nationwide, with little interference from state governments. But the government is banking on saving $1.6 billion this year from NDIS services because funding has not been taken up. Almost one quarter of Josh Frydenberg’s surplus of $7.1 billion next year comes from NDIS savings said Senator Jordan Steele-John, spokesperson for Disability Services from The Greens.
“That surplus is built on the back of disabled people and that is sick,” he said.
$500 million for the Royal Commission into Abuse of People with Disability, an extra $80 million for young carers, $280 million for 10,000 home care packages for older people, $460 million for mental health, and the previously-announced $330 million in funding for domestic violence services.
“There are a lot of single mums who are living with a disability or caring for disabled kids,” said Terese Edwards “and I take my hat off to the people who have worked hard over the years to get this Royal Commission up and running and I look forward to those people telling their stories.”
“The NDIS rollout has been a bungle, people are waiting for services, and essential services like autistic assessments cost about $800,” said Terese.
“I don’t think people should be comfortable accepting their tax cuts knowing it is coming from disability services.”
Ged Kearney, Labor’s Disability spokesperson, was thrown out of parliament today (Wednesday) because “I am so ANGRY at the Liberals promising a surplus subsidised by disability services,” she said.
Small dollars for Indigenous crisis points
There is a crisis in Indigenous Australia – kids are killing themselves. Suicide is the leading cause of death of indigenous people aged 5 to 17. To address this, the government has found about $5 million over four years. There is also about $5 million in this budget to look at ways to encourage and support Indigenous kids to attend pre-school.
And we can’t ignore all the other bad news either
The bottom line, said Cassandra Goldie is that this budget is about cuts – tax cuts for people who don’t need them that guarantee more cuts in government services in the future.
In total the government is spending $298 billion on tax cuts but you probably will see very little of that. Even Labor is committed to tax cuts worth about half of that figure.
“Overall this gives the most dollars to people who have the most, and offers people on the lowest incomes nothing,” said Cassandra.
Centrelink’s Cashless Debit Card coming soon!
This budget allocates almost $130million to extend the Indue Cashless Welfare Card program to more communities, a lot more communities. Which suburbs and towns are next has not yet been announced. The card quarantines 80 per cent of Centrelink payments, including all parenting related payments like Family Tax Benefits to a debit card that can’t be used to withdraw cash, buy alcohol or gambling products.
Centrelink automation extended to income reporting
Centrelink will collect fortnightly reports of income earned from work automatically and no longer rely on what recipients tell them, saving an estimated $2.1 billion from Newstart and working parent payments.
This estimate could be better described as a “guesstimate” because it assumes that a lot of people are currently being overpaid and not repaying their Centrelink debts. Senator Rachel Siewert from The Greens is suspicious of this announcement. “I smell a rat.”
The Australian Unemployed Workers’ Union (AUWU) said automation punishes people unfairly and causes “pain, misery and suffering.”
Child Care Subsidy problems remain
Up to a quarter of families are worse off under the new Child Care Subsidy system introduced in July 2018 because of the complex new activity test and the Additional Child Care Subsidy for at-risk kids. There’s nothing in this budget to address that.
Pre-school and early childhood education disappointments
Parents struggling with finding quality, affordable preschool options for kids will be disappointed by this budget. The moderate boost to funding support of the last few years, the National Partnership Agreement on Universal Access to Early Childhood Education, has been extended, but only until the end of next year.
Single mother Sam Page, the CEO of Early Childhood Australia, said this extension fails to provide certainty and long-term planning for preschool and kindergarten and fails to extend funding for preschool to three year-olds.
ParentsNext still broken
Even though thousands of single parents, including heavily pregnant women and their children are going without money and food because of ParentsNext requirements, the government has made no changes to this program. A senate committee heard that JobActive providers are sending mums to charities to feed their kids, but there is nothing in this budget to fix the glaring issues with ParentsNext.