Poorest to be hit hardest by 2014 Budget changes

New figures from NATSEM and the Salvation Army show that those on low-incomes will be hit hardest by the budget changes.
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01.Poor pay more

Woman looks stressed by bills

New figures highlighting that low-income earners will be hardest hit by budget cuts have been revealed from the National Centre for Social and Economic Modelling's (NATSEM) budget analysis. 

The Sydney Morning Herald has obtained figures which it says show that the poorest 20% of the country will be paying $1.1bn more to the government than the richest households. 

NATSEM's figures also reportedly show that a third of the budget cuts ($6bn), will fall on those earning between $45,000 and $63,000. Low and middle-income sole parents will be worst off however, losing between $4000 and $6250 on their earnings of less than $60,000 by 2017-18, Fairfax reports.

The analysis by NATSEM, which was commissioned by opposition leader, Bill Shorten, looks at the effect of the budget changes over four years on household incomes and includes changes to welfare, pensions and taxation as well as the impact of getting rid of the carbon and mining taxes. 

The news comes off the back of figures released yesterday by the Salvation Army which showed that nearly a quarter of people living on welfare are already unable to afford medical treatment when needed and 34% are unable to buy medicines prescribed by their doctor.

The Salvation Army’s Economic and Social Impact Survey interviewed around 2500 welfare clients to find that many welfare clients are currently struggling to make ends meet. 

The findings have sparked fresh concerns that the federal government’s proposed $7 co-payment for a trip to the doctor in the 2014 Budget may be enough to cause this group of people to avoid a basic doctor’s visit. 

“While for most Australians a fee of $7 might not sound like much, for someone who lives on less than $35 per day, including their housing costs, this is yet another burden on their already fragile financial situation,” Dr Bruce Redman from the Salvation Army said. 

The Salvos' research also found that, of those on welfare:

  • One in four is unable to afford a substantial meal at least once a day;
  • 28% had to live without heating in at least one room in the house throughout winter;
  • 38% didn’t have regular social contact;
  • 47% reported they were unable to find someone to help them when needed; and
  • 91% of respondents had limited or no savings for emergencies.



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