The Guardian July 4, 2001


Generosity? Not likely!

by Andrew Jackson

It must be an election year  John Howard is doing more backflips than 
Nadia Comaneci on a balance beam. Last week it was revealed that 500,000 
families were in debt to the Government because they had been "overpaid" in 
family tax and childcare benefits. Just four days later, John Howard 
announced that (almost) all debts had been forgiven.

The Government had been preparing to reclaim the money for some time, 
evident by the formation of a "National Command and Control Group" to co-
ordinate the collection and plans for massive disruptions to CentreLink and 
Tax Office services.

But they intended to keep the clawback a secret until July 16  two days 
after the Aston by-election.

The debacle stems from changes made to the family payments system by the 
Howard Government as part of the GST package.

Up until last year, family payments were determined by their income of the 
previous 12 months  an established figure.

From July 1 last year, families were expected to estimate their income for 
the 12 months ahead, a near impossibility.

Simple changes to family life: a child leaving school; a parent changing 
from part-time to full-time employment; a casual worker being rostered on 
more frequently; an income earner getting a pay rise; or a second parent 
commencing work, could all result in family income being underestimated.

Consequently 500,000 claimants, despite best intentions, underestimated the 
figure.

Even if a family had notified CentreLink immediately of any change, their 
annual income would be affected, and the family would be required to pay 
back the excess amount retrospectively to July 1 last year.

The families were not informed of this at the time, and would not have been 
aware of their debt until July 16 this year.

John Howard announced that the first $1,000 of each family debt would be 
forgiven. If the amount is over $1,000 then the remainder will still be 
deducted from their tax refund.

The Government's backflip on this issue is not an act of generosity, but an 
election-year stunt by a desperate government.

This one-off arrangement ignores the reality of this seriously flawed 
system.

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