ACOSS Statement on passing of tax cut package

ACOSS will hold the Government to account on its election commitment to guarantee funding for essential services, affirmed by the Prime Minister yesterday, following the passage of the tax cut package through federal Parliament.

ACOSS Acting CEO Jacqueline Phillips said:

"It is deeply disappointing that the Government tied all three stages of its tax package together, despite each stage having vastly different impacts and timeframes.

"The package includes tax cuts for people on modest incomes this year that will help boost sagging growth in consumer spending, as well as overly generous tax cuts for people on high-incomes that don't come into effect for years.

"We don't know what the economy or the budget will look like in three or five years' time. It was reckless to lock in $36 billion a year in tax cuts - almost as much as the government spends on education - five years in advance. The claim that the budget will still be in surplus despite these tax cuts is based on two flawed assumptions: that economic growth will bounce back to 3% a year and that growth in government expenditure can be held at the lowest levels in 50 years.

"If the later stages are implemented, they will have a severe impact on the budget, removing tens of billions of dollars needed for the funding of essential services. The community is struggling with rising out-of-pocket costs in health and education, $40 a day unemployment payments, long delays for in-home aged care and dental care, and prohibitively expensive childcare.

"While the crossbench is right to be concerned about housing affordability and energy costs for people on low incomes, by passing the Government's entire $150 billion tax package the Parliament is risking the future of funding for essential services and infrastructure, including social housing and homelessness and health, education and social security.

"We note that Labor, the Greens and much of the Crossbench - including Senator Lambie and Centre Alliance, all expressed concern about the impact of the Stage 3 tax cuts on the budget and essential services and warned that public spending should not be cut to pay for them.

"On the floor of Parliament yesterday, the Prime Minister again affirmed his Election commitment to guarantee the future of essential services. He promised yesterday that services would not be cut to fund tax cuts. We will hold the Government to account on this promise."