Grattan Institute report shows high-end tax cuts unfair, risky and expensive

With a Grattan Institute report out today showing the Government’s proposed high-end (Stage 3) tax cuts would make our tax system less progressive than at any time since the 1950s, ACOSS is calling on Parliamentarians to stand up for a fair and sustainable tax system.

The Grattan Institute report shows the Stage 3 tax cuts (scheduled for 2024) would:

• Cost $18 billion once implemented in 2024. This is more than Commonwealth funding for pharmaceutical benefits, universities, public schools, or unemployment payments.

• Provide 60% of the benefits to the top 20% of taxpayers.

• Be locked in five years in advance, which “carries plenty of downside risk in Australia’s current highly uncertain economic environment”.

ACOSS Principal Adviser, Dr Peter Davidson, said;

“The first stage of the tax cuts package – which offers a tax cut of $1,080 this year to most full-time workers – will help a slowing economy, but the high-end ‘Stage 3’ tax cuts scheduled for 2024 are too expensive, too risky, too unfair, and too late.

“The Government is asking the Parliament to lock in $18 billion of high-end tax cuts five years in advance, without knowing what the economy or the Budget will look like at the time.

“These high-end tax cuts will put funding for essential services at great risk.”

The Grattan Institute report reveals that to pay for the Stage 3 tax cuts the government is banking on an unprecedented squeeze in funding of public services and payments – with lower growth in public spending than any government has achieved over the last 40 years.

The Government expects real growth in Commonwealth expenditure to slow to 1.3% a year, barely keeping up with growth in the population. Health funding is projected to grow at just 0.7% a year.

“Already there are huge gaps in our essential services that are leaving people to struggle with out-of-pocket costs and huge delays,” Dr Davidson said.

“We have a housing affordability crisis, an ageing population, entrenched poverty among people who are unemployed, and eye-watering childcare costs. We need to ensure we have the public revenue we need to face these challenges as a community.

“It’s about priorities. Do we want to give $11,000 a year in tax cuts to people earning $200,000 or do we want to fix the gaps in our services and ensure we can fund them into the future?

“We’re calling on the Government, and the Parliament, to pass this year’s tax cuts but not the high-end tax cuts scheduled for later,” Dr Davidson said.

Polling shows widespread concerns about tax cuts and support for increase to Newstart

21 April 2019

Consumers call for carbon-ready homes to save billions in electricity bills

12 December 2018

My Health Record

4 July 2018

Media Alert: Australia’s Community Sector Post-Budget Breakfast

11 May 2018

ACOSS calls on crossbench to reject the Welfare ‘Reform’ Bill

19 March 2018

ACOSS welcomes marriage equality

8 December 2017

Let’s tackle child poverty in Australia

15 October 2017

Media Alert: Community sector response to Federal Budget – doorstop

9 May 2017

MEDIA ALERT: ACOSS releases Budget proposals – 10.30am (AEDT) Monday 27 February 2017

26 February 2017

By asking wrong questions, PC Inquiry distracts from the big challenges facing human services

5 December 2016

Government Super changes must deliver for 3.4 million people on low incomes

17 August 2016

Australians asked to Vote Home in bid to end the housing crisis by 2025

20 May 2016

Charities Commission will continue – a welcome announcement, says ACOSS

4 March 2016

Weatherill’s tax and services proposal poses big risks for taxpayers and service users

27 November 2015

ACOSS raises concerns with Debit Card Trials

29 September 2015

ACOSS calls for National Jobs Plan to tackle rising long-term unemployment

28 July 2015

Tax concessions key driver of housing price inflation

2 June 2015

Drop unfair plan to lower pension indexation, reform super and pension assets test instead

1 April 2015

National call for urgent reversal of $1 billion worth of damaging cuts to community services

2 March 2015

Collective community sector call for Government halt to ‘devastating’ funding cuts

31 December 2014

Reduce ‘red tape’, not much-needed capacity for Australian charities

29 October 2014

No income means no income, whether it’s 26 weeks or four weeks

2 September 2014

ACOSS pays tribute to Graeme Innes’ contribution as Disability Discrimination Commissioner

5 July 2014

State and territory community sector leaders respond to Federal Budget

20 May 2014

ACOSS welcomes launch of $100m Westpac Bicentennial Foundation

2 April 2014

ACOSS calls for Budget to be based on needs, not wants

9 February 2014

ACOSS/UNICEF call for tackling rising child poverty to be core purpose of 44th parliament

11 November 2013

ACOSS outlines reform principles for a fairer and more efficient tax system

27 August 2013

Condemnation for government’s asylum seeker policy – cruel and inhumane

22 July 2013

C20 major step for inclusion of Australia’s civil society: ACOSS

13 June 2013

Prominent Australians support increase to Newstart in May Budget

30 April 2013

Tackle $6 billion in tax loopholes and Budget ‘waste’ to make room for priority programs

11 March 2013

Roundtable begins search for ways to improve job opportunities for disadvantaged groups

21 December 2012

Census figures a wake-up call for action on affordable housing crisis leading to homelessness

12 November 2012

Community sector directors ‘overwhelmingly’ back Not For Profit regulator

17 September 2012

ACOSS and CHOICE call for States to come on board national consumer energy reforms

9 August 2012

Robin Hood comes good, except for single parent families

8 May 2012

/Public Release. View in full here.