Tackle $6 billion in tax loopholes and Budget ‘waste’ to make room for priority programs

11 March 2013

The Australian Council of Social Service today released proposals to cut tax loopholes and wasteful spending in the federal Budget worth almost $6 billion – that would help fund essential services and improve the budget bottom line.

Download ACOSS ‘Waste’ Paper

“ACOSS accepts our nation faces a challenge to strengthen the fiscal base if we are to fund important programs we all want, such as adequate income support payments for people living below the poverty line, the National Disability Insurance System, better education and health outcomes and more affordable housing,” said ACOSS CEO Dr Cassandra Goldie.

“We will not be able to meet this challenge if we remain hamstrung with poorly targeted and wasteful spending and generous tax breaks that mainly benefits people on higher incomes.

‘It’s unfair that public subsidies for services such as the private health rebate for ancillary health care and the tax rebate for medical expenses go disproportionately to people on the highest incomes while people on low incomes avoid visiting the dentist because they can’t afford to.

“Valuable public dollars should be targeted to assist people who need it the most, not people who have less need for government support.

“In this way we will be able to fund urgent measures like raising the Newstart unemployment payment by $50 a week for single people. This payment hasn’t been increased in real terms for nearly 20 years. The evidence is in from the Henry Report and last year’s Senate Inquiry that $35 a day is not enough to live on and seek employment. More delays in fixing this problem are unacceptable.

“Our expenditure saving and revenue proposals are in line with key Henry Tax Review recommendations and would make Australia’s tax and social security system fairer, more efficient, and more sustainable as our ageing population increases the demands on Government to provide essential services.

“Obviously we will need to look for sustainable ways to generate revenue for our shared future, and Henry provides a good blueprint for some of the ways we can do this. ACOSS is also undertaking further work on how we should expand our tax base, including looking at tax investments for property speculation, which is inflating property prices and cost of living pressures that particularly impacts low income households. 

“Australia is not a high taxing country, as the 6th lowest in the OECD. If we want a decent safety net, and universal health education and dental services as well as the housing and infrastructure for now and future generations, we need a sustainable tax base. Now is the right time to implement these important tax reform changes that are long overdue,” Dr Goldie said.

Media Contact: Fernando de Freitas 0419 626 155

Download ACOSS ‘Waste’ Paper

Key Proposals to curb income tax avoidance
• The use of private ‘discretionary’ trusts
• Capital gains – income from sale of assets such as property and shares
• International companies reducing tax paid in Australia
• Churning income through super accounts to avoid taxes on wages

Key proposals to tackle poorly targeted spending programs and tax breaks
• Health insurance rebate for ancillary or ‘extras’ cover not related to hospital care
• The 20% tax-break for medical ‘gap fees’ exceeding $2,060 a year
• Senior Australians and Pensioners Tax Offset
• Deduction for education expenses
• Non superannuation termination payments

ACOSS National Conference – March 25-26 in Adelaide
‘Community: The Heart of the Economy’