The Turnbull Government is reintroducing legislation to end compensation for Labor’s now defunct Carbon Tax by closing the Energy Supplement to new welfare recipients.

“The Energy Supplement was introduced under Labor to compensate for the introduction of the Carbon Tax – a tax scrapped by the Coalition in 2014,” Minister for Social Services, Christian Porter, said.

“The Turnbull Government is committed to ensuring Australia’s welfare system provides appropriate support to those in need, while remaining sustainable for future generations.

“It is simply not sustainable to continue to compensate people who have not yet even entered the welfare system for a tax that no longer exists.  Labor previously agreed with that proposition by including the estimated $933 million saving over four years for this policy measure in its costings at the last election.  If Labor now doesn’t back the legislation, it has to explain where it will find the money to cover the continuing cost of the supplement or create another $1 billion black hole in its budget.”

Under the legislation to be introduced today, the Energy Supplement will close to new income support recipients from 20 September 2017.

Existing recipients will continue to receive the supplement as long as they have remained continuously eligible from 19 September 2016 for an income support payment that attracts the Energy Supplement.

Through transitional arrangements, new welfare recipients between 20 September 2016 and 19 September 2017 will continue to receive the supplement up to 20 September 2017, as long as they remain eligible for income support.

The measure, if passed, is expected to provide savings of $933 million over four years.

The Minister said that the principle of closing the supplement to future income support recipients had already been endorsed by Parliament.

“Under the Budget Savings (Omnibus) Act 2016, the supplement has already been closed to new recipients of Family Tax Benefit A and B as well as holders of the Commonwealth Seniors Health Card from 20 March 2017,” the Minister said.

Attribution The Hon Christian Porter MP Minister for Social Service