Company tax cuts will drive further inequality

The St Vincent de Paul Society National Council has condemned the latest push to slash company taxes, noting that the proposed cuts will leave a $65 billion-dollar hole in budgets over the next 10 years.

This means that on one hand companies will receive a handout from government in the form of lower taxes, while ordinary citizens will see a reduction in services and a further unravelling of the safety net. This process will lead to greater inequality and social division.

“It is unconscionable to pursue company tax cuts at the same as slashing essential government benefits and services affecting people on the lowest incomes,” said Dr John Falzon, CEO of the St Vincent de Paul Society National Council.

“The divide between the rich and poor is growing. Census data shows that homelessness is growing. Unemployed persons and students are forced into poverty by low levels of government assistance.

“You don’t fix homelessness without investing in social housing. You don’t reduce poverty without investing in income adequacy. And you don’t reduce inequality by giving a handout to the big end of town,” Dr Falzon said.

Australia is one of the lowest taxing nations in the OECD, and the ongoing erosion of our tax base is undermining our public infrastructure, health and education systems. Since 2013, more than $12 billion has been cut from social security alone and starving publicly-funded services of resources has contributed to large increases in the costs of health, education and other essential services.

“Company tax cuts will punch a large and growing hole in the nation’s budget bottom line,” said Dr Falzon. “These cuts will be paid for by the further erosion of our social safety net and more cuts to family payments and essential services such as education and health.”

“Instead of delivering tax cuts to the wealthiest, tax reform should start at the top by removing unfair tax breaks and wasteful tax concessions. Not only will this help address the structural deficit of the Budget, but it will redirect money away from tax sheltered locations and into productive areas that will support a stronger economy and more equitable wealth distribution,” Dr Falzon said.

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