Wednesday, 21 May 2014

So how much budget pain is the Abbott Coalition Government inflictng on Clarence Valley residents?

Millionaire Australian Treasurer Joe Hockey and Finance Minister Mathias Cormann 
enjoying their cigars in a Parliament House courtyard, May 2014

The absence of any estimates of distributional impacts for different household types in the Abbott Government's 2014-15 Budget Papers means that there is no collated reference point one can go to in order to easily evaluate how progressive or regressive this federal budget is and, I suspect that this is a deliberate attempt to make the facts as difficult to find as possible for both voters and the media.

However, this post is an attempt to broadly outline how some of the budget measures are likely to impact on the 51,043 people living in the Clarence Valley on the NSW North Coast. [,Clarence Valley Estimated Resident Population, 30 June 2013]

In the Clarence Valley there are up to an estimated 330 individuals who may possibly have personal taxable incomes (as opposed to gross incomes) above $180,000 per annum and therefore over the next four years may be subject to the 2% ‘deficit’ levy on their taxable incomes in excess of that amount. This is likely to total between $400 to $10,000 per person by 2017-18, with the majority probably paying under $3,000. [Australian Tax Office, 2011-12 Individual Tax Table 6, updated April 2014]

However, there are an est. 8,248 individuals receiving Centerlink or Veterans Affairs age pensions and an est. 3,711 receiving disability support pensions who will see changes to eligibility, indexation and deeming rules for these pensions under recently announced budget measures. [Australian Bureau of Statistics, National Regional Profiles by LGA 2007-2011]

The new pension indexation will see the real value of these pension payments fall by an est. $4,352 to $5,853 per person between 2017-18 and 2020-2 if the Abbott Government is re-elected. [Combined Pensioners and Superannuants Association of NSW, media release, 15 May 2014]

Further, there are an est. 5,459 individuals under 30 years of age living in the Clarence Valley and many of these people may not be eligible for unemployment benefits for up to six months if they lose their jobs after 1 January 2015, as well as an estimated 3,906 one income families receiving Tax Benefit B who will have their payment frozen at 2014 levels for the next two years and who lose this payment after June 2015 if none of their children is under 6 years of age or their annual income is above $100,000. [Australian Bureau of Statistics, National Regional Profiles by LGA 2007-2011]

From 1 January 2015 unemployed people under 25 will get Youth Allowance not Newstart. This is a reduction in unemployment benefit of $96 per fortnight for a 22-24 year old single person with no children and $93 per fortnight for a married couple with no children in that same age group. [Australian Dept. of Human Services, 28 March 2014]

Single income families with a disposable income of $2,014 per week in 2016-17 will lose between $18 to $82 per week due to new budget measures, depending on the number of children in the family. [Whiteford, P & Nethery, D, Sharing the budget pain, May 2014]

Finally, every household receiving the renamed energy supplement will find it permanently frozen at the 1 July 2014 payment level, even though household energy costs are still predicted to rise over time.

When one adds increased medical/pharmaceutical costs, reduced Medicare rebates on a number of services, loss of some other tax and welfare related concessions, then the est. 73.6% of the local population with incomes under $46,000 per annum (and the 50% of households with weekly incomes under $769 per week) will be doing it hard under this Federal Government. [, Clarence Valley Community Profile, individual incomes 2011 and Australian Bureau of Statistics, 2011 Census QuickStats - Clarence Valley]


2014-14 Budget Papers

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