Early Income Tax Cuts: Men to Gain More Than Twice as Much as Women

New modelling from The Australia Institute

has shown that bringing forward the Government’s income tax cuts will disproportionality advantage men over women, despite women being hardest hit in terms of lost employment due to the COVID-19 recession.

Key findings

  • Total employment in March and April fell 3.9 percent for men and 5.3 per cent for women.
  • Hours worked by men fell 7.5 per cent, while hours worked by women fell 11.5 per cent.
  • Despite recession job losses affecting women more than men, bringing forward these income tax cuts will benefit men more than twice as much as women.
  • If Stage 2 of the tax cut is brought forward, for every dollar of tax cut that women get, men will get $2.28.
  • If Stage 2 and 3 of the tax cuts are brought forward, for every dollar of the tax cut that women get, men will get $2.19.

“Despite women facing a bigger impact from the COVID-19 recession, Government stimulus has focussed heavily on male dominated industries such as construction,” said Matt Grudnoff, Senior Economist at The Australia Institute.

“Now, our research has shown that bringing forward these income tax cuts will mainly benefit high income earners which, in Australia, are overwhelmingly male. Giving tax cuts to the wealthy will have a very limited stimulatory effect on the broader economy, but it will significantly widen the economic divide that already exists between men and women in this country.

“Rather than spending billions of dollars bringing forward tax cuts that mainly go to men on high incomes, the Government could better target that stimulus.

“Investing in employment intensive industries like healthcare, aged care and education will be more efficient than bringing forward the tax cuts, creating more jobs for every million dollars of stimulus. These industries also employ large numbers of Australian women who have been disproportionately affected by the COVID-19 recession.”

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