A coalition of Australia's leading welfare groups has written to Prime Minister Malcolm Turnbull and Opposition Leader Bill Shorten pleading for the preservation of a social security supplement worth between $4.40 and $7.05 per week and paid to some of Australia's poorest people.
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The energy supplement - originally introduced in 2013 as carbon tax compensation for people on the Newstart allowance, pensions and family payments - is included in the $6.5 billion of cuts that the government has urged Labor to support after previously backing or promising to consider them.
The Australian Council of Social Service, Australian Youth Affairs Coalition, Australian Unemployed Workers' Union, Carers Australia, Jobs Australia, National Welfare Rights Network, The National Council of Single Mothers and Their Children, People with Disability Australia and Welfare Rights Centre have called the move "alarming".
"Denying the energy supplement to new social security claimants will cut payments to 2.2 million people on the lowest incomes, including pensioners, sole parents, single-income families, family carers and Newstart recipients," the groups wrote in their letters to the leaders, dated August 19.
"Its removal will mean a loss of $4 a week to the $38-per-day Newstart allowance, which is well below the poverty line and has not otherwise been increased in real terms since 1994."
The groups assert that a broad range of unions, business groups and political leaders have supported increasing Newstart and that this budget measure contrasts with the government's decision to retain tax cuts given to wage earners as compensation under the carbon tax package.
They also argue that it is "unconscionable" to pursue this cut for new welfare recipients, saving the budget $1.3 billion over four years, while cutting company taxes and income tax for people earning over $80,000, costing $9 billion in total.
"Australia cannot afford such tax cuts when the government is moving to cut the incomes of people struggling to survive on the lowest incomes in Australia, living in poverty," they wrote.
ACOSS chief executive Cassandra Goldie labelled the government's budget approach "harsh and one-sided", noting the compromises being made to the proposed crackdown on high-end superannuation concessions.
"Whatever the original purpose of the energy supplement, neither Labor nor any other party with a commitment to a decent social safety net could support slashing payments to people living below the poverty line," Dr Goldie said.
The government says the funds saved supplement cut are being directed to the National Disability Insurance Scheme and Labor included the measure in its costings released shortly before the election.
Bonnie Millen, acting president of People with Disability Australia, has said the transfer of this expenditure is "robbing Peter to pay Paul" and that "we should not be making trade-offs and false economies between specialist disability support and income support".
The intervention from the welfare groups comes as the Inclusive Prosperity Commission of the Chifley Research Centre, Labor's think tank, releases modelling saying that the increase in Australian inequality between 2011-12 and 2013-14 will cost individuals $500 a year by 2019-20 thanks to dampened economic growth.
The report, which says the cost of inequality will grow to 3 per cent of GDP over the next 25 years, is evidence that Australia is "paying the price for increased inequality", according to executive director Michael Cooney.
