By reducing the real value of Working for families payments since 2010 the National government has taken a cumulative $2 billion out of the homes of working class families.
They did this by freezing the threshold for abatement at $36,827 in 2010, then in 2011 adopted a policy to progressively increase the rate of abatement from 20% to 25% and lower threshold to 35,000.
To restore spending to the 2010 level would have required an additional $700 million dollars in 2016. If the threshold had been adjusted for inflation it would be $44,500 or $51,982 if adjusted for wages.
A family on $35,000 in 2007 who was entitled to the full WFF package had received the average wage increase until 2016 would be on $51,982. That family’s entitlement has been reduced by $3,517 using the current threshold of $36,350.
The government has also removed at least a billion dollars a year in welfare payments by reducing the proportion of unemployed people receiving a benefit through draconian screening and deliberate denial by the government ministry responsible.
The biggest problem associated with the Working for Families package is the use of an In Work Tax Credit as part of the package. There is a Family Tax Credit available to all families (including beneficiaries) but to access the IWTC you have to work a combined 30 hours for a couple and at least 20 hours for a single parent.
The creation of a category of more deserving poor because they are in work is simply the imposition of a ruling class bigotry on social policy.
In an age of zero hour contracts and variable work weeks, that means a complex nightmare for many workers who have to check in with the MSD everytime their hours drop below the threshold. Some families can go in and out of eligibility almost weekly.
The tax credits and welfare payments (other than national superannuation) are only indexed to prices rather than wages and that means a steady decline relatively speaking.
The Consumer Price Index has almost no meaning to a family facing escalating rent, power, transport and food bills.
In addition, the government has decided to only change the tax credits available once there has been a cumulative increase in prices of 5 percent. There has been no increase since 2011 as a consequence.
Student support, the accommodation supplement, access to legal aid have also been allowed to steadily decline in real value.
We need to get back to a system of universal entitlements for children, students, and others. That way they are harder to take away. That has been true for National Superannuation. Every familiy should get at least a $100 per child as of right. This could be paid for with a modest surcharge on high incomes. We used to have such a benefit. When it was introduced in 1946 it was worth $40 a week in today’s dollars with average families being twice as large as today and a baby boom coming. A world way had just finished. Since then, production per person has probably increased three times. We can afford it today.
(Information used in this article is largely thanks to a recent report of the marvellous Child Poverty Action Group)