Open letter from the Community Sector:
Don’t rush to pass more tax cuts while three million live in poverty
30 April 2019
As community organisations providing essential services to people on low and modest incomes, we call on the Parliament not to rush to pass more income tax cuts before the elections, and to reverse those already legislated to go to high income-earners after 2020.
Many people on low and modest incomes won’t benefit at all from tax cuts
It is unconscionable to give away more tax cuts, on top of the $227 a week already going to people on $200,000 a year, while three million people live in poverty.
Most households in the lowest 40% by income get no benefit from tax cuts. It’s not good enough to offer temporary ‘bonuses’ to people receiving social security when high income-earners get permanent tax relief.
Lifting Newstart Allowance must be the first priority
Newstart Allowance is just $40 a day. Lifting Newstart by $75 a week would cost $3 billion a year, one quarter of the cost of the tax cuts already legislated for taxpayers on over $90,000 a year.
Lifting Newstart and other payments is a better way to stimulate a slowing economy
Tax cuts, especially those going to high income-earners, are not effective as an economic stimulus because much of them will be saved rather than spent immediately.
Low income-earners, including people on Newstart Allowance, have to spend every dollar they get on the essentials such as rent and food, so it goes straight into the regional economies that need it most.
Raise Newstart and guarantee essential services before any more cuts to income tax
Last year, $140 billion of tax cuts were passed, putting the future funding of essential health, education and community services at risk. Half of the tax cuts due to start from 2020 go to the top 20% of taxpayers.
We urge the Parliament to block any attempt to rush through even more tax cuts in the final days before we go to an election. The next Government should guarantee essential services and increase Newstart instead.
‘…there’s one thing that we’d heartily applaud – a lift in unemployment benefits. Newstart hasn’t kept up with national living standards for more than a quarter of a century, shrinking sharply as a share of average and minimum wages, and relative to the age pension. And it’s set to shrink even further, as it is indexed to prices rather than wages. That’s why the Henry Review specifically called out the collapsing ratio between Newstart and the age pension.” -- Chris Richardson, Deloitte Access Economics (March 2019)
• Adult Learning Australia
• Anglicare Australia
• Australian Association of Social Workers
• Australian Youth Affairs Coalition
• Australian Unemployed Workers Union
• Baptistcare Australia
• Better Renting
• Carers Australia
• Council to Homeless Persons
• DCSS Australia
• Disability Employment Australia
• Early Childhood Australia
• Good Shepherd Microfinance
• Homelessness NSW
• Human Rights Legal Centre
• Justice Connect
• Life Without Barriers
• Mount Isa Family Support Service and Neighbourhood Centre
• National Ethnic Disability Alliance
• National Association of Community Legal Centres
• Relationships Australia Queensland
• St Vincent de Paul Society National Council
• Youth Action
Contact: Australian Council of Social Service, 0419 626 155