New economic analysis shows the Government can improve the budget bottom line without introducing unfair budget measures that target vulnerable Australians and increase inequality.
As the Parliament resumes this week to debate the Federal Budget, figures in the latest ACTU Economic Bulletin show Australia redistributes less income than the majority of OECD countries, which results in a relatively high level of inequality.
ACTU President Ged Kearney said the Abbott Government has made a conscious choice to increase inequality by choosing budget measures that slash income redistribution even further.
“By freezing family payments, slashing family tax benefits and cutting increases to parenting, aged, disability support, carer and veterans’ payments – the Government is saying that it does not believe in an equal society for all Australians,” Ms Kearney said.
Federal Budget measures that reduce income redistribution and increase inequality include:
Freezing family payments for four years
Limiting Family Tax Benefit payment B to families with children under six
Cutting indexation on the Single Parenting Payment from July 2014
Cutting indexation on the Age Pension, Disability Support Pension, Carer Payment and Veterans’ Affairs Pensions from September 2017
Freezing eligibility thresholds for three years on the Family Tax Benefit, Child Care Benefit and Rebate, Parenting Payment, Newstart and Youth Allowance
A low income couple with kids will lose an average of $1138 this year as a result of the budget, while a single parent in the same circumstances will lose an average of $1086, according to NATSEM figures.
“These unfair budget cuts aren’t the only way to repair the budget bottom line”, said Ms Kearney.
“The ACTU Economic Bulletin shows the Government could reform superannuation tax concessions instead of choosing a package of budget measures that will make Australia a more unequal society.
“The value of the superannuation concession to top income earners is so large that they actually receive more support for their retirement, through super tax concessions, than low income earners do through the age pension.
Australia forgoes more revenue on tax expenditure than many advanced economies yet the Abbott Government has a blinkered approach to this budget.