Budget must put care sector services and jobs ahead of tax cuts

22 April 2021

The Australian Council of Social Service would welcome substantial investment in community sector services and jobs in the Federal Budget, but is strongly warning against further tax cuts, which would undermine our ability to fund quality services which we all rely on.

Making tax cuts fails to act in the evidence about what works in terms of lifetime incomes and supporting jobs.

It has been reported today that the Federal Budget will include funding for tens of thousands of care-sector jobs, including in aged care, disability services and mental health.

It has also been reported that the Government is considering further tax cuts in the Federal Budget, which would not help people on low incomes and would jeopardise investment in services into the future.

ACOSS CEO Dr Cassandra Goldie said:

“We need to generate decent, new jobs in the community service sector, which is made up of 80% women, so that we can properly resource important services like aged care, disability, mental health, homelessness and domestic violence services.

“The Budget should equip us as a community to handle the big challenges we face together, like the yawning gaps we can see in the delivery of human services. As a first step, $2 billion per year should be invested in community services in order to reverse the cuts seen since the 2014 Budget and respond to growth in population and increases in the cost of delivering services.

“Much of the economic stimulus so far has been focused on male-dominated sectors like construction and roads. Yet there are huge unmet needs in female-dominated care services, such as aged care and childcare, where it’s less expensive for the government to generate jobs.”

A single job created through tax cuts is estimated to be costing up to $500 000. In road building or through private investment incentives, the cost is estimated to be $300,000 to the Federal Budget. Each job created by Government funding for aged care costs just $70,000 and each job in child care costs just $50,000.

“We can provide quality services, such as disability and health services, by ensuring our tax system is fair. This means dropping the high-end income tax cuts which would see tens of thousands of dollars more go to people earning hundreds of thousands, who are mostly men.

“We’re warning the Government against even more tax cuts in the Federal Budget, which would not help people on low incomes and would ultimately impact them through a lack of investment in essential services into the future.

“The best way to target support to workers on low incomes and to support jobs and the economy is through the transfer payment system. In particular, we need an increase to family payments for those with children, rent assistance for struggling renters and an adequate increase to JobSeeker which many workers rely on when they’re in low paid and often insecure work.

“Our recent evidence also shows that transfer payments targeted to people on low incomes is overwhelmingly spent in the real economy on essentials helping to keep others in jobs, whereas tax cuts for those in higher incomes are often saved.

“The lowest 30% of households by income, including many single parent families, mostly headed up by women, get absolutely no benefit at all from any tax cuts.

“We’re already seeing a two-speed COVID recovery and the Government should use the Budget as an opportunity to create a fairer future – not leave people behind in crisis by entrenching inequality,” Dr Goldie said.

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