Australian pre-election tax cuts not “justifiable” at social services' expense Australian pre-election tax cuts not “justifiable” at social services' expense

Australian pre-election tax cuts not “justifiable” at social services' expense
21 Feb 2018

The Australian Government has been urged to invest more in social services rather than “squander billions on unjustified tax cuts”.

The call comes from the Australian Council of Social Service (ACOSS), which has submitted a strongly-worded statement in the lead-up to May’s Federal Budget, reports Probono Australia.

ACOSS’s Budget Priorities Statement said the country faced a clear choice in this Budget.

“The last budget marked a significant and welcome shift in budget policy from cutting spending on essential benefits and services to strengthening revenue,” it pointed out. “In 2018, we urge the government to continue down that path and take further action to bolster public revenue while investing in essential services and support.”

“Regrettably”, however, the Government was still proposing company tax rate cuts that are projected to cost AUS$14 billion (US$11 billion) in 2026. It had also foreshadowed cuts to personal income tax rates.

“Tax rate cuts cannot be justified while cuts to essential benefits and services affecting people on the lowest incomes are also proposed and the budget is not yet in a robust position,” ACOSS warned.

The campaigning welfare body wants to see unemployment payments, which have not increased in real terms for 24 years, boosted by AUS$75 (US$59) per week for single people who are either unemployed or studying. It has also urged the Government to slash superannuation tax breaks for retirees, axe the existing private health insurance rebate and add a levy to sugary drinks.

ACOSS is likewise calling for the removal of tax shelters, loopholes and what it terms “other unjustified inconsistencies in the tax base”. 

In total, its proposals would require an extra AUS$3.2 billion (US$2.5 billion) in funding, which would rise to AUS$6.7 billion (US$5.3 billion) in 2019-20. Revenue would increase at the same time by AUS$3.4 billion (US$2.7 billion), jumping to AUS$13 billion (US$10.3 billion) in 2019-20.

This scenario, ACOSS said, would cut the current budget deficit by AUS$0.3 billion (US$0.2 billion) this year and by AUS$6.5 billion (US$5.1 billion) in 2019-20, resulting in a surplus of AUS$3.9 billion (US$3/1 billion) in 2019-20.

ACOSS chief executive Dr Cassandra Goldie said: “It would be a big mistake for this government to press ahead with personal and corporate tax cuts when we’re facing major funding shortfalls in vital areas such as the NDIS [National Disability Insurance Scheme], health, needs-based schools funding and action to reduce poverty.”

She warned that Australia could not “afford to repeat the past mistake of handing out unfunded tax cuts in the run-up to elections”.

Gill Oliver

Gill Oliver is a business and property journalist who has written for The Daily Mail/Mail Online's This is Money, The Press Association and many national and regional newspapers and magazines.

The Australian Government has been urged to invest more in social services rather than “squander billions on unjustified tax cuts”.

The call comes from the Australian Council of Social Service (ACOSS), which has submitted a strongly-worded statement in the lead-up to May’s Federal Budget, reports Probono Australia.

ACOSS’s Budget Priorities Statement said the country faced a clear choice in this Budget.

“The last budget marked a significant and welcome shift in budget policy from cutting spending on essential benefits and services to strengthening revenue,” it pointed out. “In 2018, we urge the government to continue down that path and take further action to bolster public revenue while investing in essential services and support.”

“Regrettably”, however, the Government was still proposing company tax rate cuts that are projected to cost AUS$14 billion (US$11 billion) in 2026. It had also foreshadowed cuts to personal income tax rates.

“Tax rate cuts cannot be justified while cuts to essential benefits and services affecting people on the lowest incomes are also proposed and the budget is not yet in a robust position,” ACOSS warned.

The campaigning welfare body wants to see unemployment payments, which have not increased in real terms for 24 years, boosted by AUS$75 (US$59) per week for single people who are either unemployed or studying. It has also urged the Government to slash superannuation tax breaks for retirees, axe the existing private health insurance rebate and add a levy to sugary drinks.

ACOSS is likewise calling for the removal of tax shelters, loopholes and what it terms “other unjustified inconsistencies in the tax base”. 

In total, its proposals would require an extra AUS$3.2 billion (US$2.5 billion) in funding, which would rise to AUS$6.7 billion (US$5.3 billion) in 2019-20. Revenue would increase at the same time by AUS$3.4 billion (US$2.7 billion), jumping to AUS$13 billion (US$10.3 billion) in 2019-20.

This scenario, ACOSS said, would cut the current budget deficit by AUS$0.3 billion (US$0.2 billion) this year and by AUS$6.5 billion (US$5.1 billion) in 2019-20, resulting in a surplus of AUS$3.9 billion (US$3/1 billion) in 2019-20.

ACOSS chief executive Dr Cassandra Goldie said: “It would be a big mistake for this government to press ahead with personal and corporate tax cuts when we’re facing major funding shortfalls in vital areas such as the NDIS [National Disability Insurance Scheme], health, needs-based schools funding and action to reduce poverty.”

She warned that Australia could not “afford to repeat the past mistake of handing out unfunded tax cuts in the run-up to elections”.

Gill Oliver

Gill Oliver is a business and property journalist who has written for The Daily Mail/Mail Online's This is Money, The Press Association and many national and regional newspapers and magazines.

Leave a Reply

All blog comments are checked prior to publishing