The Albanian government is being urged to scrap the next Tier 3 tax cut in favor of raising job-seeking rates to lift more Australians out of poverty.
Anglicare Australia’s pre-budget proposal argues that the tax cuts due to start next year “will erode much of Australia’s progressive tax system”.
“According to Parliament’s own statistics, 78% of the tax cut profits go to the wealthiest 20%,” said Kathy Chambers, CEO of AngliCare Australia.
Chambers said the government should instead increase JobSeeker and other Centrelink pay rates.
“Raising these payment rates will ease that hardship and lift millions of people, including hundreds of thousands of children, out of poverty,” she said.
“All of this can be done well within the cost of the third phase of tax cuts.”
The tax cuts, which are expected to take effect in July 2024, are part of tax changes implemented by the Morrison administration that will primarily affect middle-to-high income earners.
Phase 3 will eliminate the marginal tax rate of 37% on income earners between $120,000 and $180,000 and establish a flat rate of 30% on income earners between $45,001 and $200,000.
The third tax cut is set to cost $254 billion over 10 years.
“More than 3 million Australians live in poverty and wealth inequality is now at its worst in 75 years,” said Anglicare’s filing.
“Future tax cuts for high-income earners will exacerbate that inequality, making the tax system less progressive and more unfair.”
Anglicare argues that tax breaks for high-income earners should be abolished, while social security payments such as job seekers, child care payments and caregiver payments should be raised to pandemic levels. I claimed.
The report found that 1.44 million Australian adults and 840,000 children would benefit.
“These changes would cost $198 billion over 10 years, significantly less than the cost of the proposed Phase 3 tax cuts,” the report said.
Chambers also argued that the money lost from upcoming tax cuts would leave less money for the federal government to use to lift people out of poverty.
“With a $254 billion hole in the future budget, no budget can protect the general well-being of the people if we introduce these tax cuts,” she said.
The report also found that the tax cuts for the richest 20% of Australians outweighed the cost of financing unemployment benefits.
The tax revenue lost to concessions such as negative gearing is over $68 billion annually, about $37 per week from all Australian workers.
Meanwhile, the cost of unemployment benefits in 2016-17 was $10.99 billion, or $6 per worker per week.
https://www.theaustralian.com.au/breaking-news/calls-for-controversial-stage-3-tax-cuts-to-be-scrapped/news-story/bec5da3c4c1d5cee70bb2b3ebbfba61a Anglicare Australia calls for scrapping controversial 3rd tax cut