Coalition Caught Out On Budget Family Benefit Clawback Wayne Swan - Shadow Minister for Family and Community Services

Media Statement - 6 June 2004

The Howard Government has been caught out attempting to clawback promised additional family payments in the Budget through sneaky fine print.

The promised $600 end of year payment to families will be clawed back after the election by a secret clause that will trade it off against future increases in fortnightly payments.

In a stunning development the Government owned up to the clawback today by raising the prospect of a legislative band-aid to remedy it.

The clawback will diminish the future value of fortnightly benefits by ensuring they are only indexed to the slower growing CPI rather than a faster growing wages benchmark.

Based on current trends and Treasury forecasts, the clawback will mean over the course of five to seven years the overall maximum annual rate of Family Tax Benefit A will be worth no more than it otherwise would have  – wiping out the real additional value of the $600 end of year payment in the Budget.

Despite insisting in a Senate Estimates hearing on Friday that Labor was wrong the Minister’s office provided the following weasel words to Sunday Sunrise today:

“The Government will take whatever action is necessary to deliver on this commitment that families receive $600 per child and that the real value of the payment is maintained in the future. If this requires future legislative action, it will be taken.”

Clearly the Government has been caught out in its swindle and is now seeking to cover it up with the prospect of another legislative band-aid.

The clawback shows the Howard Government is up to its old tricks by using sneaky indexation clauses to clawback money from the pockets of ordinary Australians.

After introducing the GST, the Government clawed back Pensioners GST compensation and it attempted to hike petrol excise by indexing it to the inflationary effect of the GST.

If the Howard Government were in the corporate world, its deceptive and misleading practices would result in almost certain conviction for fraud.

The Coalition’s family benefit clawback shows they have no plan to address the long-term financial pressure on families – they are only interested in a short term political fix.