Budgeting is about setting priorities and setting national directions. When governments are under pressure to raise extra revenue and make savings, it's important that the burden is carried by those with the broadest shoulders.
Wayne Swan has made a commendable effort to share that burden more fairly than is often the case. He has achieved a modest surplus while assisting many on low incomes. Indeed, low income households have not been asked to carry the budget back into surplus.
However, working age people who rely heavily on income support remain most disadvantaged. For example, the Newstart Allowance is set at such a low level that it's hard for anyone to search for work and live decently. In past years this group even missed out on stimulus payments.
A new income support supplement announced in the budget is a step in the right direction, amounting to $1.1 billion over four years. It goes to people on a number of payments, including Newstart and Youth Allowance. While a more substantial increase is needed so that this group can meet their essential living costs, this decision is a sign of some movement in recognising that action is needed.
When budgets are tight, governments tend to seek savings by moving people from an expensive payment category like parenting payment and the disability pension to cheaper payment categories like Newstart.
By moving a larger number of single parents from parenting payment to Newstart in this budget, the Government will effectively remove $686 million out of the hands of low income families. While some parents may be able to find work and improve their incomes, many in this group will simply have a much lower income to provide for their children and themselves.
While it makes sense to encourage income support recipients into work, cutting back on payments is generally not the best way to achieve that result. Also, for many single parents in this situation, there are significant challenges to securing work which allows them to take good care of their family.
Surely it is better to actively promote work expectations and ensure access to child care while offering improved opportunities for education, training and employment assistance.
Relying on assistance that boosts opportunity rather than payment cuts does cost more, but parents with young children should be a high priority for our community. Research suggests that improving the incomes of disadvantaged parents can make a major difference for their children's future.
Swan has done