Election FactCheck is checking key claims in political advertisements. Here we look at the “If Tony Abbott Wins, You Lose” ad from Labor.
Families will lose the Schoolkids Bonus
The Coalition has made clear it will scrap the Schoolkids Bonus, a cash payment introduced by Labor last year that gives families receiving Family Tax Benefit Part A payments $410 annually for each child in primary school and $820 for each high school student.
The Coalition has been saying it will abolish the bonus since January. Opposition Leader Tony Abbott has called it “a cash splash with borrowed money that has nothing to do with education” on the basis that it is paid as a straightforward cash transfer, unlike the Education Tax Rebate it replaced, where parents could only claim a tax deduction on the basis of receipted expenses. That rebate was introduced on Kevin Rudd’s first watch in 2008, following a commitment in the 2007 election campaign, during which the Coalition touted its own scheme.
The Coalition is promising a straightforward cut of the Schoolkids Bonus in order to save the government about $1.3 billion a year, with no direct promise of compensation for the families that will lose out. For example, the Coalition’s Paid Parental Leave scheme will not benefit most families that currently receive the Schoolkids Bonus, in part because paid parental leave is only paid with respect to newborns, and in part because it is only paid to employed mothers while on maternity leave. A substantial proportion of families eligible for Family Tax Benefit Part A (and hence the Schoolkids Bonus) are not employed.
On the other hand, in recent years Labor’s record on cash payments to families has not been above criticism. Since 2008, the government has introduced a number of relatively small reforms that cumulatively amount to a gradual winding back in eligibility to Family Tax Benefit Part A for middle income families. So while the Schoolkids Bonus represents a real cash boost to families, the proportion of families entitled to receive it is likely to fall over time.
Nonetheless, if the Coalition axes the Schoolkids Bonus, low income families in particular will be worse off than they would be under Labor.
It is true that under a Coalition government, families will lose the SchoolKids Bonus - Gerry Redmond.
Low-income workers will lose their increased super contributions
This statement implies that the superannuation already accrued by low income workers or the rates currently in place will be reduced, which is not true. But it is true that the Coalition is intending to remove the Low Income Superannuation Contribution. And there will definitely be an adverse impact on low-income earners over the long run as the Coalition proposals will reduce future superannuation contributions for low income earners by up to $775.50 per year.
But there is no effect on superannuation accrued to date, and the current rate of superannuation guarantee contribution will not be reduced.
In his budget reply speech, Tony Abbott announced two Coalition proposals that affect low-income earners’ superannuation.
First, the rate at which the mandatory superannuation guarantee contribution must be paid will not increase as quickly under the Coalition as under the government. Legislation has been passed to phase-in an increase in superannuation from 9% to 12% by 2020. The current rate is 9.25%.
The Coalition has announced a two-year pause in the rate of the increase with the rate remaining at 9.25% until 30 June 2016, instead of increasing to 10% by that date. This should not be described as losing the increased contribution.
Second, the Low Income Superannuation Contribution will be repealed. This contribution was introduced in 2012 to reimburse up to $500 of the contributions tax paid by low-income earners on their compulsory superannuation. This could be described as losing a contribution, as it removes the entitlement to a future government contribution.
Both of these changes will have an adverse impact on low-income earners, as they will affect the rate at which superannuation accrues. Over the eight years from 1 July 2014 to 1 July 2020 when the superannuation guarantee contribution would reach 12% under the legislated schedule, the contributions each year paid on behalf of a person earning $37,000 would be $777.50 lower ($500 from the low-income super contribution and $277.50 as a result of the superannuation guarantee rate).
This reduction in contributions will have an effect on future retirement balances in the future, making lower income earners worse off.
The statement that low-income earners will “lose their increased super contributions” is broadly true, but only in terms of future contributions - Helen Hodgson.
Abbott will cut billions from education, including those schools who need it most
Although the Coalition has not indicated how it intends maintaining the funding for the government’s Better School Plan, there is no indication that money will be cut, or that these cuts are targeting disadvantaged schools.
When contacted by Election FactCheck, a spokesperson for education minister Bill Shorten said the above claim alludes to Tony Abbott’s commitment to only four years of the Better Schools funding, sometimes known as the Gonski reforms, in contrast to Labor’s six-year commitment.
The Department of Education, Employment and Workplace Relations estimates that the current government will provide an additional $7.5 billion over the next six years to the five states that signed up to the Better Schools Plan. Four years of this funding only total $1.9 billion, so those last two years make a big difference.
Although the amount the Coalition has committed to is about $5.6 billion less than Labor’s plan (and $8.3 billion less if Queensland, Western Australia and the Northern Territory jump on board after the election), at this stage, the Coalition has provided no official information that the party intends to cut education funding.
The exact numbers are up for debate. The department’s forward estimate over six years is $11.5 billion for Better Schools if all states participate. The current government advertises $9.8 billion over six years for Better Schools. This excludes millions more for students with disabilities, as well as funding for National Plan for School Improvement initiatives, such as developing the Australian Curriculum.
The Coalition’s figures are equally elusive. Abbott could be committing $1.2 billion less in the next four years with a quick sleight-of-hand, by giving Queensland, Western Australia and the Northern Territory the Better Schools funding, without restoring National Partnership funding (which is federal money for disadvantaged schools, teacher quality and literacy and numeracy).
In short, the numbers are difficult to compare, as the Coalition has not released concrete policies around Better Schools, the National Plan School for School Improvement or funding for students with special needs. But the claim “cut billions” seems a bit of an over-reaction.
Future funding differences are hard to predict. After all, Labor’s original Gonski review called for an additional $5 billion a year. Now, even with all states, it’s a maximum of $3.7 billion per year, and a minimum of $0.5 billion (one-tenth of the Gonski review’s recommendation).
The statement that Abbott will “cut billions from education” cannot be substantiated - Squirrel Main.
12,000 people will lose their jobs
The Coalition has stated among its budgetary savings a reduction of 12,000 positions in the public service. It has also suggested this can be done through “natural attrition” rather than redundancies.
It is not yet clear whether the 12,000 reduction is in addition to the cuts recently announced by Labor or instead of them. But it’s likely these come on top of Labor’s previously announced cuts in order to help fund the Coalition’s election promises.
It is technically feasible to achieve a reduction of 12,000 or more jobs by natural attrition over three years. But new appointments to the Australian Public Service have been around 11,000 a year in recent years, not including transfers or promotions. The cuts through natural attrition would then affect the big “front-line” service agencies (human services, the tax office, customs etc) that the Coalition claims it would protect, and its impact would be somewhat arbitrary and hard to manage across and within agencies.
It would also involve stopping recruitment entirely for a considerable period, with long-term consequences for agencies and with an impact on youth employment in particular. The greatest number of newly-engaged staff are young people moving into base level graduate or similar jobs, though the numbers joining at older ages has increased over the last decade or more. Freezing recruitment would mean freezing graduate recruitment in particular.
Several agencies are already offering voluntary redundancies to meet the current government’s previously announced cuts, and thus a further cut of 12,000 or more is likely to require significant redundancies, whether voluntary or involuntary.
Under a Coalition government, 12,000 jobs are set to go from the public service - Andrew Podger.