Scrap tax cuts to address issues that matter: poverty, jobs, affordable housing, essential services and climate change

Despite early signs of improvement in the budget and unemployment, we cannot turn our backs on the big challenges that remain. We cannot afford a short-sighted and misleading election contest over who can magically conjure up larger tax cuts and a smaller budget deficit at the same time.

ACOSS Acting CEO Edwina MacDonald said:

‘’We welcome the marked improvement in employment and the budget as we recover from the latest lockdowns, but this will be a false dawn if the next government takes its eyes off the big challenges still before us. 

‘’After 18 months of turmoil, we need more stability and certainty in our lives but we won’t get that by dodging the hard issues: the ongoing disruption from the pandemic, the lack of secure employment, poverty and stagnant wages, unaffordable housing, climate change, and chronic underinvestment in essential services like aged care. We cannot pretend that those problems are behind us.

‘’The pandemic demonstrated the power of effective government and the dangers of ineffective government. We’ve recovered better than most countries from lockdowns due to the public health response and investment in income supports that halved poverty. It didn’t come from tax cuts, as the government claims. 

“We won’t get effective government from an election fought over who can offer the largest tax cuts. That will only deprive the next government of the resources it needs to mend essential services, alleviate poverty, and respond to climate change. 

“The $26 billion additional investment in the NDIS  and commitment to fully fund it in future is welcome, though the devil will  be in the detail.  More investment in NDIS and other care services was always going to be needed, and shows why it’s irresponsible to commit to $16 billion a year in tax cuts that mostly go to people who don’t need them.

“It beggars belief that the major parties have given priority to a $180 a week tax cut for people on $100,000 a year or more, while those worst affected by the pandemic are left to languish on a Jobseeker payment of $319pw. Again there’s no increase in the lowest income support payments despite an expected $4 billion reduced spend on the payment over the forward estimates, as well as withdrawal of disaster payments for people affected by future lockdowns. There is no excuse to leave Jobseeker at below poverty level, especially when this will be the lifeline for people who lose paid work because of future lockdowns.

“The fall in unemployment to its September 2021 level of 4.6% is welcome and demonstrates that employment has bounced back quickly after the latest lockdowns. But with only 180,000 more jobs than before the pandemic (March 2020), we have a long way to go. 

“The government is right to prioritise lower unemployment over a lower deficit, but it should be more ambitious. Unemployment should be reduced consistently below 4% to improve the lives of those affected – including the 900,000 people languishing on unemployment payment for over a year, and to get wages growing again. 

“We still aren’t seeing enough commitment and funding to rapidly and fairly tackle climate change and support people with the least to, for example, access clean technology like energy efficiency retrofits and rooftop solar for low-income households. Shockingly the government has budgeted an extra $1 billion over 4 years in fuel tax credits for industry, which will make climate change worse.

‘’The government says it is committed to cutting the budget deficit more quickly once unemployment is lower than before the pandemic. We need the parties to spell out how they will do this BEFORE the election. We need a commitment from the parties that they will not revert to more harsh spending cuts. 

“That’s why ACOSS and 36 community sector organisations seek a Guarantee from all political parties in the forthcoming election that if they win government, instead of cutting taxes, they will raise the resources needed to properly fund essential services and income supports rather than cutting them back. That must include lifting Jobseeker and related payments above the poverty line.”