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News Article

The Budget outcry
Monday, May 26, 2014

The federal government was clearly not ready for the extreme rejection of its May 2014 Budget.  Labor and Greens opposition is par for the course – but formerly loyal true-blue Coalition voters are devastated too.  Why?

One-income families in Coalition heartland, and “Howard’s Labor battlers” who voted for Tony Abbott last September because they thought he would follow in John Howard’s footsteps, are thoroughly disillusioned.  Unless there is change, they will not vote that way again.

It is sad, because Tony Abbott once championed equal treatment for all families.  In his first speech after being elected to federal parliament in 1994, he said: “One way to help families with children is to change the tax system to take account of taxpayers’ responsibilities as well as their income. A family-friendly tax system stresses self-help and individual responsibility.”

He said that introducing income-splitting for tax purposes would be one way of achieving this goal – but he rejected that option because it would help high-income earners most. 

Instead, he argued for an increase in family allowances – allowing parents to pay for childcare if both are in the paid workforce, or to help with other expenses where one parent stays home to care for the children.

But 20 years on, what has happened?

The federal budget introduced on 13 May 2014  came at a time when Australia has a big foreign debt.  Understandably, the government wants to turn that around.  Budget spending cuts have caused pain to many sectors of the Australian community – but the biggest losers are the single-income families that Tony Abbott once claimed he wanted to help.

Families with children are doing well where both parents are in paid work.  They now receive $36,000 of their total family income entirely tax-free.  They may also qualify for Family Tax Benefit A (a replacement for the old Family Allowance).  They will also receive a rebate of up to $7500 per child for childcare expenses – without a means test.  As each baby is born, the mother will receive up to $50,000 in government-funded paid parental leave.  High-income families benefit most.

How different is the treatment of one-income, two-parent families with children!  They receive only $18,000 of their income tax-free.   Their Family Tax Benefit A is far less than the childcare rebates given to two-income families with children.  Their means-tested Family Tax Benefit B, intended to partly alleviate their lack of an extra $18,000 tax-free threshold, will disappear when their youngest child turns six.  As each baby is born, the mother will receive just $1000 ($2000 for the first child) – a far cry from up to $50,000 provided by the government for two-income families.  How can that be “fair dinkum”? 

The budget’s message is clear: mothers who care for own children at home are seriously devalued.  Yet a recent study conducted by the Australian National University shows that children placed in long daycare for more than 21 hours a week have significantly poorer educational outcomes than those who stay home with their mums (The Australian, 15/4/14).

Punishing families who do more than most to ensure a skilled, emotionally stable future workforce is no way to run this country.


  • Family and parenthood

View next article - Punishing stay-home mums undermines our future workforce


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