Tax cuts and housing tax breaks are Budget Booby Trap

ACOSS today condemned the Federal Government and Labor Opposition’s mutual commitment to high-end tax cuts and regressive tax breaks for housing.

Australian Council of Social Service CEO Dr Cassandra Goldie said:

“If they go ahead, the $17 billion in annual tax cuts will booby trap future budgets, making it almost inevitable that essential services and social security payments will be cut.

“Over the past year, we’ve all seen how important decent care services and an adequate income support safety net are for the wellbeing and security of the community. At $44 a day, payments for people who’ve lost paid employment are manifestly inadequate to keep people housed and properly fed. We’ve also seen up close the awful effects of chronic under-funding of services like aged care and mental health.

“It’s unbelievable that in the middle of a third round of lockdowns, with over a million people on social security payments excluded from disaster payments, we’ve paused to discuss whether people on $200K plus should get a tax cut of $180 a week.

“We’ve been here before – years of unaffordable tax cuts set us up for the savage cuts to social security, health and other essential services in the 2014 budget.

“It’s deeply disappointing that both major parties now back regressive tax breaks for housing that promote speculation in the asset we all need – a place to live. The longer negative gearing and capital gains tax breaks continue, the faster house prices and rents will rise.

“People on low and modest incomes are doing it tougher than ever and we face even greater inequality if we don’t fix our services and our safety net. Governments should offer people hope that once we come out of the pandemic, we can all rely on decent essential services and an adequate safety net that lifts people out of poverty.

“Instead, these tax cuts and tax breaks help those who are least affected by lockdowns and recession – people with secure housing and jobs and high incomes – and leave behind those who will continue to struggle to earn a decent income and house themselves,” Dr Goldie said.

Despite Australia being the wealthiest country in the world by median household wealth, we are the sixth lowest in the OECD for investments in social benefits.

This is principally because Australia is already a low-tax nation.

– Australia is the 9th lowest taxing country out of 37 OECD nations

– An average Australian wage earner pays 24.1% of their overall income in income tax, lower than an average American worker (24.4%).

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