News that the Federal Government is considering bringing forward income tax cuts in the October Budget is deeply concerning, says the Australian Council of Social Service.
“Millions of people are unemployed and facing years of hardship – they are the ones who are really struggling in this pandemic recession and they stand to get absolutely no benefit from income tax cuts,” ACOSS CEO Dr Cassandra Goldie said.
“We know that people on higher incomes are saving money, likely due to ongoing uncertainty; while people on low incomes have no choice but to spend on the day-to-day essentials in order to get by.
“It’s clear to economists that instead of wasting money on high-income tax cuts that will be saved by those in a position to do so, we should:
1. Help those who need financial support the most and will spend in the real economy on the basics, and
2. Invest in caring services, including aged care, as well as social housing and energy efficiency retro-fits, all of which are guaranteed to create jobs and deliver important public benefits.
“The experience of the 2019 tax cuts, which were saved rather than spent, strongly suggests that another round of cuts, especially those going mainly to individuals earning $90,000 or more, would do little to boost growth in jobs and incomes.
“The best way to stimulate the economy and to support those hardest hit by the pandemic recession is to put in place a permanent, adequate rate of JobSeeker in the October Budget.
“Not only will this stimulate the economy by giving people and businesses the certainty they need to recover, but it will help avert the mounting homelessness, mental health and domestic violence crises.
“Failing to act on homelessness, mental health and domestic violence now by ensuring people can cover the basics on this long, hard road to recovery, would have a tragic human impact and would also lead to increased costs on the Budget over time.
“Bringing forward high-income tax cuts, instead of putting in place a permanent, adequate increase to JobSeeker would be a dangerous mistake with lasting and devastating consequences that would drive up damaging social and economic inequality,” Dr Goldie said.