UnionsACT Response to ACT Concessions Review

UnionsACT has today made a submission to the ACT Government Concessions Review.

Australia and the ACT’s system of support and concession payments is more tightly tested than any other OECD country. The proportion of the working-age population receiving income support is at its lowest levels since the early 1990s, and the number of people (not just as a proportion of population) receiving a payment other than the Age Pension has fallen in recent years. The 2015-16 Budget papers (Paper 3, page 48) states that the Concessions budget for the previous year was just $86.6 million, representing just 1.7% of the $5.2 billion ACT Budget. The Discussion paper states that the budget for Concessions Programs will be $51.3 million.

UnionsACT’s view is that while there may be some justification for improved targeting of ACT-based concessions (i.e. based on income or need rather than age), the Concessions Program is already very targeted. There is a view, promoted in conservative media, that much of our welfare support goes to households in the middle and upper income brackets. This is not the case, as the discussion paper and other research demonstrates; again, this indicates that the Concessions Program is already very targeted.

Furthermore, UnionsACT does not support reduction in concessions (“savings”) as a means to improve the ACT Budget bottom line. Of the ten options presented in the discussion paper, six focus on “sustainability” or “targeting”, that is, a reduction in concession program cost.

UnionsACT suggests that if the principle (or even a significant) purpose of the Concessions Review is to address the ACT budget deficit (“reduce program cost”), then there are other areas that ACT Government should focus on before reducing concessions, and the priority must be to increase revenue. Similarly, if the Government is seeking to make concessions more sustainable over the long-term, there are other actions, especially regarding energy, water and sewerage concessions, that could be considered.

In our view it is not appropriate for a review into concessions to seek to make budget savings. Many of the options refer to other jurisdictions that have Liberal governments, and the rationale for many of the proposed changes are incongruous with the values of a Labor government.

As UnionsACT has noted in the past, the taxation and transfer systems should aim to be fair, efficient and equitable. There is a fallacy that efficiency is intrinsically equitable. In fact, in some cases efficiency must give way to equity and fairness.

For the ACT Concessions program, it may be fairer (but less efficient) to have concessions that are less targeted so as to reduce the risk of harming the most vulnerable and disadvantaged in our community.

It is the view of UnionsACT that overall, the proposals in the discussion paper would do little to improve the fairness of the ACT Concessions Program.

Download the submission here.