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Labor set to agree family benefits freeze as Clive Palmer stonewalls Coalition
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Labor is likely to allow another $2.6bn of the Abbott government’s proposed savings through the Senate, but many other budget measures are set to be blocked because the Palmer United party (PUP) vows it will “not speak to” the Coalition at all.
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Labor is understood to intend to allow through the government’s plan to freeze for two years the rates at which family benefits are paid, a decision that delivers savings of $397m this financial year and $2.6bn over the next four years and is due to take effect from 1 July.
But other budget measures face an uncertain Senate path with the PUP’s leader, Clive Palmer, telling Guardian Australia he and his three senators had met over the weekend and resolved they would not negotiate in any way or even speak to the government about any budget measures.
“This is an attack on Australia’s way of life. Our party room resolved not to talk to the Liberal and National parties at all,” he said.
Asked whether a carte blanche refusal to negotiate was not an unusual tactic for a party holding balance-of-power votes in the Senate, he said: “Well we are unusual, we don’t like them, we don’t like this budget and we aren’t going to talk to them.”
The stance, if adhered to, would put in doubt any legislation the government sought to pass through the new Senate – which sits from 1 July – that was opposed by Labor and the Greens.
The PUP has said it will oppose the changes to unemployment benefits, the $7 Medicare co-payment and the changes to the indexation rate for the pension and the increase to the pension age. All these measures are also opposed by Labor and the Greens.
The move to allow through the freeze on family benefit rates comes after Labor also confirmed it would not oppose the “temporary budget repair levy” – the two-year 2% income tax increase for those earning more than $180,000 a year, which would raise $3bn.
Labor may also support, at least in part, a separate budget measure to freeze eligibility thresholds for all government payments for three years. In government Labor froze the eligibility thresholds for family payments, a move Tony Abbott initially called “class warfare” although he eventually waved the savings measure through.
But Labor has said it will oppose separate plans in the Abbott government’s first budget to stop single-income family payments when the youngest child turns six, as well as the budget’s proposed changes to unemployment benefits, higher education, pensions and the Medicare co-payment.
As it prepares for negotiations to try to get its key budget measures through the upper house, the government has labelled Labor’s stance irresponsible.
Christopher Pyne, the leader of the government in the house of representatives, told the ABC: “Labor are like the people that started the fire and then when the fire brigade turns up to put it out, they try and mug the firefighters. I think the public see them for that, I am sure the Senate, when the legislation reaches the Senate, will go into the negotiation phase that is the hallmark of our democracy and I'm confident that they will see the benefits of the government's plan to repair the budget debt and deficit disaster left to us by Labor and I assure that once they've seen that, they'll be much more supportive of it than they sound at the moment.”
Labor has said it will oppose the reindexation of fuel excise, leaving the fate of that decision – which would raise $2.2bn over the next four years – in the hands of the greens, who support it in principle but are uncomfortable with the proceeds being hypothecated towards road funding, while the federal government hands responsibility for public transport funding to the states.
Palmer said he had had an initial discussion with the government about the repeal of the carbon and mining taxes but he had heard nothing back.
The health minister, Peter Dutton, said that by opposing the Medicare co-payment, Labor and the independents were “abandoning Medicare”.
“The independents in the Senate need to decide whether or not they support Medicare and if they support Medicare and they want Medicare into the future they have to support this package because at the moment Medicare having grown 42% over the last five years, having gone from $8bn a year 10 years ago to $20bn a year now … so that’s the decision for the senators – do they support Medicare and the strengthening of Medicare going forward because the Labor party clearly has abandoned Medicare,” Dutton said.
