Benjamin Haslem
This is the first par on the lead story in this morning's Sydney Morning Herald:
MORE than 110,000 Sydney households concentrated in the city's north, north-west and key inner suburbs will be caught by the Federal Government's new $150,000 benchmark for identifying the undeserving rich.
It's wrong.
But the Herald is not alone on this. All week many media outlets have been running the line that all families earning more than $150,000 a year are going to lose family payments following changes outlined in Tuesday's Budget. They're not because they were never receiving them in the first place.
The problem for Wayne Swan is that the Family Payments system the Rudd Government inherited is ridiculously complicated.
What Swan announced on Tuesday night was that the family payment, Family Tax Benefit B, would for the first time, be means tested. As would the $5000 baby bonus.
Stick with me here. This is complicated.
There are two family tax benefits.
Family Tax Benefit A has always been means tested and you can bet your house most of those 110,000 families referred to in the SMH have always been excluded by that means test. That's because that payment is for two-income families and cuts out once a household income passes about $100,000. Obviously, too, most of those 110,000 households will not be in line for the baby bonus as they're not all pregnant! So they won't lose there either.
Family Tax Benefit B was established by the Howard Government to reward stay-at-home mums. The payment is available to families where the second income earner (usually mum) earns less than about $20,000 a year. The size of the principal earner's income was irrelevant. In other words a mum could stay at home or earn up to about $20,000 a year, be married to Bill Gates and receive welfare in the form of a Family Tax Benefit B payment.
Meanwhile, a family with two income earners each on about average salaries bringing home a combined $110,000 a year received NO family payment because they failed the Family Tax Benefit A means test. It was this unfairness that Rudd and Swan tackled on Tuesday night.
So all those households referred to by the Herald, with an income of over $150,000 and where the lower income earner brings home more than about $20,000 a year, are losing no family payments. That's because they weren't receiving any to start with.
And many will be better off (leaving aside the fact they're getting an income tax cut) because the child care rebate will be lifted from 30 per cent of out of pocket childcare fee expenses to 50 per cent and paid quarterly instead of annually. And the amount they can claim per child also rises. It's also not means tested, though the child care payment is (but let's not confuse you further!)
The Herald briefly explains this at the tail of this morning's story but you can bet most people think ALL families with an income of over $150,000 are losing family payments when they are not. And in fact many are better off.
As a former journalist who covered welfare in the Federal Press Gallery, I know how complicated this is. And the added difficulty for the reporter would be dealing with news desks and editors who just don't get it.
The lesson here is that trying to explain changes to a complicated system and then get it through numerous gatekeepers is difficult.
And once the media gets an idea in its collective head, it's very hard to shake.
I have no idea how the government tried to sell this but they should have thoroughly briefed the reporters before Tuesday's Budget lock up.
Press Gallery veteran, Sue Dunlevy, who covered welfare with me, was spot on last Thursday with the Daily Telegraph's splash on this. Sue reported that 40,000 familes nationally would be worse off. Compare this with the SMH's 110,000 figure for Sydney alone.
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