Anglicare Australia calls for controversial Stage 3 tax cuts to be scrapped
The Albanian government is being urged to scrap the upcoming Phase 3 tax cuts in favor of lifting the JobSeeker rate to lift more Australians out of poverty.
A pre-budget submission by Anglicare Australia argues that the upcoming cuts, scheduled to kick in next year, will “erode much of Australia’s progressive tax system”.
“Parliament’s own figures show that 78 per cent of the benefits of those tax cuts go to the richest 20 per cent,” Anglicare Australia chief executive Kasy Chambers said.
Ms Chambers said the government should instead increase the rate of JobSeeker and other Centrelink payments.
“Raising the rate of these payments will ease that struggle and lift millions of people out of poverty, including hundreds of thousands of children,” she said.
“All of this can be done for well under the cost of the Phase 3 tax cuts.”
The tax cuts, which will come into effect in July 2024, are part of changes to the tax regime implemented by the Morrison government and largely affect medium to high income earners.
Phase three involves eliminating the 37 percent marginal tax bracket for those earning $120,000 to $180,000 and creating a flat rate of 30 percent for those earning between $45,001 and $200,000.
The Phase 3 tax cuts will cost $254 billion over ten years.
“More than three million Australians live in poverty and wealth inequality is now the worst it has been in 75 years,” the Anglicare submission said.
“Upcoming tax cuts for high-income earners will exacerbate that inequality, making our tax system less progressive and more unfair.”
While arguing that the tax breaks for high earners should be scrapped, Anglicare’s submission argued that social security payments such as JobSeeker, Parenting Payments and Carer Payments should be lifted to the level they were during the pandemic.
The report found that 1.44 million Australian adults and 840,000 children would benefit.
“These changes would cost $198 billion over ten years, significantly less than the cost of the proposed Phase 3 tax cuts,” the report said.
Ms Chambers also argued that the money lost to the upcoming tax cuts would leave the federal government with less money to use to lift people out of poverty.
“Now we’re not going to have a budget that can take care of people’s general well-being if we put these tax cuts in place because there’s a $254 billion hole in future budgets,” she said.
The report also found that the lost income from tax breaks to the richest 20 per cent of Australians offsets the cost of funding unemployment benefits.
The lost tax revenue from concessions such as negative gearing is more than $68 billion a year or about $37 a week from every working person in Australia.
Meanwhile, the cost of unemployment benefits in 2016-17 was $10.99 billion, or about $6 a week per worker.
Originally published as Calls for controversial Phase 3 tax cuts to be scrapped