Economists call for end to middle-class welfare
- BY:MILANDA ROUT
- February 25, 2013 12:00AM
LABOR and the Coalition have been urged to target middle-class welfare amid warnings about the "unsustainable" load on the federal budget, with the $4.5 billion spent on Family Tax Benefit B each year a prime target for cuts.
"I think certainly the first priority of the new government is to target middle-class welfare," she said. "In the long term, I believe the government ought to be aggressive in reducing the welfare state. And it's going to be politically unpopular."
Ms Novak said tax breaks such as the Family Tax Benefit B -- which entails transfers of up to $150 a fortnight to couples where the primary earner earns up to $150,000 and the second earner no more than $25,600 -- should be rethought as often the people who receive them "don't necessarily need them".
Grattan Institute chief executive John Daley said while middle-class welfare -- and Family Tax Benefit B -- should be examined, such measures would not solely balance the government's books.
"It (Family Tax Benefit B) is obviously something that needs to be on the list," he said.
"But it isn't going to solve the whole problem. It will certainly help but it won't get you the whole way there."
Mr Daley disagreed with Mr Argus's concerns about the expansion of social welfare, saying in comparison with other developed countries, Australia does not have a big government.
"It's not welfare eating the Australian government budget," he said. "Australia is an outlier because its unusually small for a developed economy."
Mr Daley said the government should be in surplus given the state of the economy and there was a debate needed on "which tough decisions we are prepared to make" to ensure the country gets back in the black.
"You need to be looking at everything," he said.
"You need to accept that there will be losers, whatever happens."