A Fairer Tax System: Some important steps but further to go

ACOSS welcomes today’s release of the Australia’s Future Tax System report which has set a framework for a fairer, more sustainable tax system for the Australian community, but is disappointed that Government has ruled out a number of its key recommendations.

“Hard decisions need to be taken to build a strong economy for the future and support services for the community. In not taking some of those tough decisions, Government has missed an important opportunity,” Clare Martin, CEO, Australian Council of Social Service.

ACOSS is today responding to four key areas in the Henry Report which covers both the tax and transfer system.


“For over a decade ACOSS has advocated replacing the flat 15% tax on super contributions with a simpler, fairer tax rebate. We are pleased the Henry report has adopted this proposal,” said Ms Martin.

“Today Government has taken an initial step forward to make it easier for low-income Australians to save for retirement with its $500 annual contribution for workers up to $37,000.

“However the increase in the threshold in super contributions to $50,000 is a step backwards because it restores tax breaks for high-income earners.

We urge Government to implement these Henry recommendations for a super system that helps low-income Australians save for retirement.”

Housing Affordability

“Housing affordability is a critical issue for all Australians, especially those on low incomes,” said Ms Martin.

“Presently the tax system inflates housing prices while the social security system does not provide adequate assistance for people struggling in the private rental market.

“The Henry Report proposals would help alleviate the housing affordability crisis through increases in private rent assistance. Proposals to reduce rental support for public tenants are concerning but these have been ruled out by Government.

“Government’s decision not to adopt key changes to tax treatment of housing including land tax, are disappointing because they benefit people with housing wealth at the expense of middle and lower income people trying to break into the market.

“Housing affordability is too important to be shelved without an ongoing commitment.”


“Although the Henry report acknowledges the present split between pensions and allowance payments is unfair, complex and discourages workforce participation, its proposals do not resolve this fundamental unfairness,” said Ms Martin.

“ACOSS welcomes proposals to reduce the payment gap by increasing the single Newstart rate and indexing it above CPI.

“ACOSS has argued this would require an increase in the single Newstart allowance of $45 per week, increasing it from $231 to $276 per week. ACOSS has proposed this for the upcoming Federal Budget.

“This is a complex and sensitive area especially for people already on payments. We urge Government to commit to simplifying the system and to consult widely with the community.

“No group should be worse off and those in deepest poverty should be better off as a result of these reforms.

“People with disabilities required to work part-time and some families with a part-time second earner would have better work incentives if Henry’s proposals to reform income tests are adopted.”

Community Services

“While there have been strong recommendations from both the Henry Report and Productivity Commission to establish a national Charities Commission to oversee non-profit regulation, we are disappointed this has not yet been adopted by Government.

A Charities Commission is supported by the not-for-profit sector and we strongly urge Government to establish one.

“However we welcome the important assurance from Government it will not support any changes to tax concessions that will harm community services organisations.”

Media Contact: Clare Cameron, ACOSS – 0419 626 155