A fairer tax and welfare system - fast facts

Profile of poverty and financial stress rate

• The after-housing poverty rate is 14.2% of households or 3.93 million people for July 2025.
• Poverty rates are highest for households relying on JobSeeker (66.5%), Other government payment recipients (68.8%), single parents (37.2%), lone persons (26.4%) and renters (23.1%).
• Financial stress rates are highest for households on JobSeeker (51.8%), and other welfare payments (42.6%), lone person (14.1%) and renters (23.2%).
• Single parent households are more likely to experience financial stress than other households, with 34.1 per cent in financial stress.

Reform

The proposed reforms aim to reduce poverty and improve equity through small but progressive changes to the tax and welfare systems. Despite being budget-neutral, the models would lift between 95,000 and 1.03 million people out of poverty, up to a third of those currently affected.

All models increase JobSeeker, Youth Allowance and Parenting Payment (Partnered), with indexation tied to the Age Pension rather than CPI. Some models also include increases to Parenting Payment (Single), Disability Support Pension (+$100/fortnight), Family Tax Benefit Part A (+$66/fortnight) and Commonwealth Rent Assistance (+15%).

One model introduces a Guaranteed Minimum Income—a means-tested top-up for all households below the poverty line, not just those receiving welfare. It simplifies eligibility, includes investment income, and avoids mutual obligation requirements.

The total cost ranges from $4B to $11.2B annually, less than 1.5% of the Federal Budget, and is covered by fairer superannuation tax settings. Alternatives include tightening the Age Pension assets test and adjusting childcare subsidies for high-income families.