New details have emerged about the Government’s stunning decision to change one of its signature policies less than 24 hours after Tuesday’s Budget was handed down.
The policy in question is the one-off energy assistance payment, which will give $75 to singles and $125 to couples to help them pay their power bills.
Only certain Australians are eligible, and in the version of the policy outlined in the Budget, recipients of the Newstart unemployment benefit were not among them.
But on Wednesday morning, Treasurer Josh Frydenberg abruptly announced the payment would be extended to Newstart recipients.
Labor immediately pounced on the backflip, saying it was proof the Budget was “already falling apart”.
Finance Minister Mathias Cormann and officials from the Department of Prime Minister and Cabinet (PM&C) were grilled on the subject during Senate estimates this morning.
Labor Senator Penny Wong asked the officials when they had learned of the change to the energy assistance payment.
The acting deputy director for social policy said she had received a letter from the office of Social Services Minister Paul Fletcher the evening of the Budget.
Dr David Gruen, the department’s deputy secretary for economics and strategy, admitted he had no idea until he was told about Mr Frydenberg’s interview on ABC radio the morning after the Budget.
Senator Wong engaged in several testy exchanges with Senator Cormann, who revealed he had discussed changing the policy in two meetings on Budget day — one in the early evening, before Mr Frydenberg’s speech to the House, and another afterwards.
Prime Minister Scott Morrison and Mr Frydenberg were also present for those meetings. But Senator Cormann said he could not recall who else was there.
“Whose idea was it to extend the measure?” Senator Wong asked.
“I can’t remember who made the initial suggestion. There was a consensus that we needed to ensure that we could facilitate speedy passage through the parliament,” Senator Cormann said.
“We were very keen for this measure to be legislated through the parliament this week because we wanted age pensioners to be able to get this cost of living pressure relief in a timely matter.
“In particular, in a context where the Government doesn’t have the numbers in the Senate, as we often do, we had a conversation about what might be required in terms of adjustments to the measure in order to facilitate speedy passage.”
Yesterday, Labor MP Linda Burney revealed she had circulated an amendment to the crossbench before the Budget, which would have extended the energy payment to Newstart recipients.
The suggestion from Labor is that the government changed its own policy to remove the possibility of losing a vote on that amendment.
Senator Wong asked Senator Cormann whether a note taker from PM&C was present for the first meeting where the change was discussed. He took the question on notice, saying he needed to “refresh my memory”.
“Why won’t you tell me?” Senator Wong pressed.
“I want to make sure that the answer I give you is 100 per cent accurate,” Senator Cormann responded.
“I had lots of meetings that day. There were lots of meetings with different types of people.
“There might have been others (in the meeting). There might have been other ministers. I want to check that.”
He said he could not recall whether Mr Fletcher, the minister responsible for the energy payment, was involved in the discussions.
“This is two days ago, are you seriously telling us you can’t remember?” Senator Wong said, clearly frustrated.
“Yes. Because there were a whole series of meetings that day,” he replied.
“It is simply not believable for you to tell the Australian people and the parliament that you don’t remember if the line minister was present at a meeting to change the Budget,” she said.
Senator Cormann could not say exactly when the final decision to extend the payment to Newstart recipients was taken.
The original policy, as listed in the Budget, cost $284 million. The version that passed the House yesterday, with Newstart recipients added, cost $365 million.
During Question Time, Labor labelled that difference an $80 million “black hole”.
“This morning, less than 24 hours after delivering the Budget, the government caved into Labor pressure and backflipped on energy payments for thousands of vulnerable Australians, blowing an $80 million black hole in the Budget,” Opposition Leader Bill Shorten said.
“Doesn’t this just confirm, after six years of cuts and chaos, this Budget is nothing but a con that has already fallen apart?”
“The performance in the Budget over the last 12 months means that we are $10 billion better off this time this year than we were at the time we handed down the last Budget,” Mr Morrison replied.
“And we believe that if we are in that position where we have outperformed on a Budget, and we have been able to deliver a better financial outcome, then we should take the opportunity to ensure those that need it most are given the opportunity to ease their cost of living pressures.”
The question was re-asked and re-answered in similar fashion several times.
As late as 9pm on Budget night, Mr Frydenberg was on TV confirming Newstart recipients would not be eligible for the payment.
He had completely reversed direction by the time he appeared on ABC radio early the next morning.
“Let’s talk about those on welfare. For those on Newstart, it’s nothing extra. They’ve had nothing for nearly three decades,” host Sabra Lane said.
“Well, a couple of things. Firstly, the energy supplement will be extended to people on Newstart,” Mr Frydenberg responded.
“It will be?” Lane asked, taken aback.
“It will be,” he confirmed.
“Is that a last-minute decision?” she asked.
“That is something that the government has taken as a decision, and there will be other people who also receive payment,” Mr Frydenberg said.
Lane asked whether the policy shift was a “tacit acknowledgment” the government had not done enough for Newstart recipients.
“No, what we have done is ensure that people can have their cost of living pressures — see, people who are on a disability support pension or people who are on an aged pension, or a parenting payment or carers payment or veterans payment, they’re the ones who were targeted with this $125,” Mr Frydenberg responded.
“Now we’re extending it to Newstart and others, but they’re different types of payments.
“You see, the vast majority of people on Newstart move into a job and off that plan in 12 months. Newstart is also indexed twice a year, and the people who are on Newstart tend to also be on other government payments, whether it’s the Family Tax Benefit or a parenting payment or something.”
The government had faced strong criticism for initially excluding Newstart recipients from the payment. On Monday, it said the policy was “limited to those who don’t have the opportunity to work to earn additional income”.