Stage 3 tax cuts would guarantee funding cuts

People earning $200,000 a year are among the top 5% of income earners, says the Australian Council of Social Service in a strong warning against stage 3 of the tax cuts, which threaten service funding into the future.

Australian Council of Social Service CEO Cassandra Goldie said: "The very real risk here is that the unprecedented scale of these tax cuts will guarantee funding cuts to essential services we all rely on. We already have the 7th lowest tax base in the OECD.

"It's not responsible budgeting to lock in big tax cuts so far in advance when we don't know what the state of the budget or economy will be.

"The government is banking on the lowest growth in funding for services in 50 years and growth in GDP and wages of more than 3% to pay for the tax cuts. That's just not the real world and is unlikely to happen.

"People on low and middle incomes will end up paying the price in the form of funding cuts to the services they rely on, such as health, education and community services. "We know from bitter experience that funding cuts to services will fall hardest on young people, single parents, people who are unemployed, First Nations people and people with disability.

"The stage 3 tax cuts threaten to destroy our ability to meet the challenges we face as a community. How will we respond to the Royal Commission into Aged Care or tackle housing affordability and poverty?

"People earning $200,000 are among the highest 5% of income earners - they are high-income earners, especially when compared to people on the median wage of $55,000 a year, and people on Newstart, which is equivalent to about $15,000 a year.

"Are we really going to give people on $200,000 a tax cut of $11,000 per year before we increase Newstart? Newstart has not been increased in real terms for 25 years and at $40 a day it is condemning people to poverty instead of supporting them to get through tough times.

"We urge the Parliament to demand the Government split the Bill so each stage can be considered on its merits. This is the only responsible course for the country," Dr Goldie said.