Stage 3 tax cuts will leave Tasmanians behind

A photo of the back of a group of people running and their is one runner that is being left behind.

The Anglicare Australia network is calling on the Federal Government to repeal planned tax cuts and prioritise lifting people out of poverty.

A paper shows that Tasmanians would get the least benefit from the Stage 3 tax cuts of any State or Territory.

Legislated by the previous Federal Government, the tax cuts are due to come into effect in 2024.

“Tasmania has the country’s least affordable rents and its highest rate of poverty. Instead of getting help to cope with soaring living costs, these changes would see taxpayers in Tasmania supporting the country’s highest income earners,” said Anglicare Executive Director Kasy Chambers.

Anglicare Australia recently released Left Behind, which drew on Australian Bureau of Statistics data to project that 78% of the tax cuts would go to 20% of Australia’s highest income earners. It showed the Stage 3 tax cuts would leave behind regional and disadvantaged areas.

Anglicare Tasmania CEO Chris Jones said it did not make sense to proceed with the cuts, which would reduce budget revenue by more than $20 billion a year.

“A lot has happened since the original tax plan was announced, including a global pandemic. Australia is grappling with high inflation and people are experiencing significant cost of living pressures,” he said. “The Stage 3 tax cuts will benefit those who least need support, and further widen the gap between rich and poor.”

In a pre-Budget submission, Anglicare Australia urged the Government to withdraw the Stage 3 cuts and instead invest in measures to improve the living conditions of thousands of Australians.

“Wealth inequality is now the worst it has been in 75 years,” it said in the submission. “Forthcoming tax cuts for high-income earners will worsen that inequality, making our tax system less progressive and more unfair.”

Anglicare pointed to a range of better alternatives. It recommended the Government choose to:

–   end the nation’s shortfall of social and affordable housing

–  raise the rate of payments like Jobseeker so people have an income above the poverty line

–  invest in growing the care industry, especially the aged care workforce

–  adequately fund the National Disability Insurance Scheme

–  appropriately fund psychosocial support services

–  strengthen mental health services in schools.

“Our network regularly reminds governments that poverty is not inevitable – it is a policy choice,” said Chris Jones.

It’s time to abandon these unnecessary tax cuts and ensure all Australians have access to basics including a place to call home.

A costly choice

A follow-up paper to Left Behind argues that the tax cuts will only make Australia more unequal and more unfair.

A Costly Choice argues that Australia already loses billions of dollars each year on tax breaks and concessions that benefit people on the highest incomes.

“When the tax cuts were passed, we were told they would help average Australians. Our analysis shows that’s not true,” says Kasy Chambers.

“Our research shows that Australia already spends $72 billion each year on tax benefits for the top 20 percent of income earners. That includes concessions and discounts for properties, investment homes, superannuation, and trusts. These tax cuts would add another $14 billion to that number. We’ve already seen that changing the system can be tough. That’s why the Government should act now and stop these changes before they start. Failing to act would be a costly choice for all Australians.”

Read Anglicare Australia’s briefing paper, Left Behind, here.

Read A Costly Choice here.

More on the cost of living

Anglicare Tasmania’s Social Action and Research Centre (SARC) contributed to the University of Tasmania’s submission to the Senate Inquiry on the Cost of Living in Australia.

The submission argues that low-income households most need urgent relief. It identifies food security and housing affordability as apparent factors impacting their rising cost of living.

The submission is published as #48 on the Senate Inquiry website.

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