Less than 24 hours after Treasurer Joe Hockey told the ABC that reports about a recasting of the budget were wrong, the AFR reports this morning that a deal has been done with Labor to scrap $10 billion worth of welfare measures in this year’s budget.
From the AFR:
“After backroom talks on Wednesday, the Government agreed to abandon two bills which, between them, contained 31 cuts to welfare payments, for a total budget saving over four years of $13.6 billion.”
However, Prime Minister Tony Abbott sought to toe the party line yesterday, saying the Government will push on with the more than $10 billion in cuts which remain stalled after the agreed changes.
“In flagging the possible restructuring of the social services legislation, we’re not walking away from anything. We support all of the budget measures,” he said.
“We accept that some of them are supported by other parties. Some of them are still subject to negotiation with other parties and with the crossbench. So we don’t walk away from anything. We stand by everything because we inherited a debt and deficit disaster.
Having spent so much political capital in hyping a budget emergency and the need for substantial fiscal restraints, the Government can hardly walk away from its strategy, particularly given the Opposition is already positioning for a victory on the Budget.
“For months, Labor has repeatedly called on the Government to drop its cuts to pensions, cuts to families and cuts to young people,” Labor’s Families spokesman Jenny Macklin said.
We will know more in December when the Government releases the MYEFO.
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