The Turnbull government has upped the ante with the Senate over billions of dollars in welfare cuts by making funding for the National Disability Insurance Scheme contingent on the cuts being passed.
A week after the government introduced a budget omnibus bill that tied its long-stalled child care changes to the passage of welfare cuts that have been stuck since the 2014 budget, it announced on Monday that the leftover savings - about $3 billion more - would be quarantined for the NDIS in 2020.
If the Senate blocks the bill, then the NDIS would have to be funded by tax increases or budget cuts elsewhere, while the child care changes could stay on hold.
Treasurer Scott Morrison said the planned return to surplus would not be affected because the money was going to go to general revenue anyway and would then be spent on the NDIS.
Now it goes into the special NDIS fund.
"Every dollar that is in that bill that is realised...will result in more funding for child care for hard working Australians and their families and provide even greater assurance about the future of the NDIS," Mr Morrison said.
Labor's families spokeswoman Jenny Macklin called the threat disgusting, callous and uncaring.
The Greens, too refused to budge, saying the disabled should not be held hostage to welfare cuts.
Under the budget bill, almost $1 billion to be saved from ending carbon tax compensation for welfare recipients, was already earmarked for the NDIS. By allocating the remaining $3 billion, that means $4 billion for the NDIS is now contingent on the bill passing.
The omnibus bill ends $4.7 billion in Family Tax Benefit supplements and implements the childcare reforms that were to be funded by ending these supplements.
It also contained billions more in welfare cuts that have been on the books since the 2014 budget and have nothing to do with funding childcare.
These include removing payments for pensioners, making the unemployed wait longer for the dole and ending carbon tax compensation for future welfare recipients.
To woo the crossbench, the government increased the Family Tax Benefit – available to families earning up to $80,000 a year – by $20 a fortnight. This will cost $2.4 billion.
The taxpayer-funded paid parental leave scheme will be increased from 18 weeks to 20 weeks. If a mother has an employer scheme of fewer than 20 weeks, she will be entitled to a total of 20 weeks with the public scheme acting as a top-up. This will cost another $700 million.
The net saving to the budget over four years is about $4 billion. But this is more than $2 billion less than the original budget savings because of the cost of the increased FTB payments and the paid parental leave, both designed to satisfy the crossbench.
The government informed Senate crossbenchers, Labor and the Greens about its new plans for the rest of those savings on Monday.
