ACOSS condemns company tax cuts

ACOSS condemns the company tax deal that will rip $5.2b over the forward estimates from the Federal Budget. This tax cut follows the $4 billion hit to the budget just last year when the Government gave away personal income tax cuts to higher income earners.

It is egregious for the government to pass another unfunded tax cut at the same time it has already cut well over $10b from social security and still wants to cut at least $7b more, including removing the energy supplement for millions of people on the lowest incomes.

The one off payment for energy prices in this company tax cut deal with NXT is a cynical mirage.

It will do nothing to help people really struggling with the cost of energy. Blink and this payment will be gone. The billions in social security cuts already legislated – and those still planned – wipe out this payment multiple times, and will affect people in the long term.

What’s worse is that parents will lose any payment they receive because of the freeze to Family Tax Benefit that was passed last week. And Newstart allowance recipients – people unemployed, single parents, people with disability – living below the poverty line get nothing.

Who will pay for this tax cut?

Clearly it is people – and who will hurt the most?

The 730000 children in poverty and their parents, people who can’t get paid work and all those on the very lowest incomes in Australia.

The IMF confirms that lifting the incomes of people in the bottom 20% has a stronger impact on growth than tax cuts for higher income earners.

“To say that tax cuts paid for by social security cuts is necessary to deliver jobs for people in poverty is just plain cruel,” Dr Goldie said.

Key points:

  • The company tax cut will cost $5.2b over four years
  • The single one-off payment to pensioners and parenting payment recipients for energy prices is $75 to singles, $125 to couples.
  • This payment seems to go to people on part pensions including those on incomes of $50,000 pa.
  • Loss of the energy supplement (one of the Zombie measures) would see a pensioner lose $364pa.
  • Someone on Newstart gets nothing, but would lose $228pa with loss of energy supplement.
  • The FTB freeze legislated last means that a single parent on $60,000 with two kids in high school will be more than $300 worse off over two years.
  • A single parent with two kids in primary school will be over $440 worse off over the two years of the freeze.