Federal election 2016: Labor savings to take aim at students, uni graduates, high-income earners

LABOR will push ahead with savings measures aimed at students, university graduates and higher-income families as it tries to head off attacks on its economic credibility.

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LABOR will push ahead with savings measures aimed at students, university graduates and higher-income families as it tries to head off attacks on its economic credibility.

The high-risk move, just three weeks out from the July 2 election, sees Labor reverse its two-year opposition to some government cuts, with around $1 billion to be clawed back from students and families over the next four years.

Families earning more than $100,000 a year will lose benefits worth hundreds of dollars per child, while graduates with a higher education loan will have to start paying it back once their salary hits $50,000.

Opposition Leader Bill Shorten’s team has found another $900 million through 11 new savings. Picture: Jason Edwards

As well, Opposition Leader Bill Shorten’s team has found another $900 million through 11 new savings, mostly from tweaking low-profile funding agreements, and scrapping private health insurance rebates on natural therapies.

Households with a combined income of more than $100,000 will be $366 per child worse off under Labor’s plan to reduce the Family Tax Benefit A supplement by 50 per cent.

About 137,000 families will be affected by the change, which doesn’t go as far as the Coalition’s changes, which would have seen the FTB-A end-of-year supplements phased out by 2018 and further cuts to the FTB-B payments.

Opposition leader Bill Shorten with Chris Bowen. Picture: Jason Edwards

Shadow finance minister Tony Burke said the U-turn on the so-called “zombie measures’’ had been made because the government had tripled the deficit and added $100 billion in debt to the nation.

But the U-turn, coming on top of an earlier $8.5 billion backdown on family welfare payments, which Labor had previously opposed, has blown a hole in Labor’s “fairness narrative’’ and left it scrambling on Friday to pull down websites, online advertising and petitions railing against some of the cuts Labor was now supporting. The website dontpocketourpension.com.au now returns only an error message, as does givefamiliesafairgo.org.

While the measures show Labor taking steps to address Australia’s sea of red ink, they undermine the party’s “putting people first’’ campaign slogan, and hit areas where Labor is politically strong.

Mr Shorten said it was “most important” that over the next four and 10 years governments “take action to fundamentally reduce the level of government debt”.

“We are committed to job, education and Medicare. We are committed to doing Budget repair that is fair,” he said. “We’re committed to improving the bottom line of the national Budget without smashing household budgets.”

Coupled with measures already announced — including changes to negative gearing and multinational tax — Labor says the budget will be $8.9 billion better off over the next four years and $105.4 billion stronger over the decade.

But Treasurer Scott Morrison said on Friday the Opposition’s numbers can’t be trusted.

“They remain in a big black hole. They threw a few pebbles in it today but they’ve gone nowhere near filling it,’’ he said.

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