What Australians would rather see billions spent on instead of tax cuts for the rich

Published: 12/10/2022
Category: Working life
Published: 12/10/2022
Category: Working life

There has been a great deal of media and political fuss made over ‘Stage 3 tax cuts’ but rather than become lost in the numbers, let’s have a look at what they mean for workers.

These cuts would seek to abolish the current top tax bracket of 37 per cent, meaning those who are paid anywhere from $45k to $200k are taxed the same proportion of their income at 32 per cent. It would cost Australia $243 billion dollars. 

Those worst off under the Stage 3 Tax Cuts
  • Women

  • Minimum wage workers

  • Aged care workers, hairdressers, and café workers

The tax cuts would benefit high income earners the most. They will receive 95 per cent of the benefit whereas 75 per cent of tax payers will get no benefit from the tax cuts.

Greg Jericho from the Centre for Future Work explained that someone with a median taxable income of around $58,000 – a typical income of bus drivers, copywriters and pest controllers – will get a tax cut of $330.

“The Stage 3 tax cuts are very poorly designed to deliver the greatest benefits to the very few,” Jericho said.

Jericho’s comment is hardly a surprise if we look at the other end of the scale. For example, billionaires like Harvey Norman chairman Gerry Harvey have added to their wealth by pocketing Jobkeeper payments intended to keep low paid workers in their jobs during the COVID outbreak. For Harvey, this was an estimated $22 million.

He then refused to give his own workers a pay rise although the company doubled its profit during the pandemic. Harvey blocked any and all critics on Twitter.

And yet the billionaire will not be one of the people feeling the pinch if the tax cuts are implemented. 

Giving $9,000 to Australia’s highest income earners while giving $0 to those on minimum wage? It’s simply unfair.  

A great way to worsen gender inequality

According to research from The Australia Institute, men will get twice as much of the tax cut as women.  

“While women get 33 per cent of the tax cut, men get 67 per cent of the tax cut. This means that for every $1 of the tax cut that women get, men get $2,” states the ‘Rich Man’s World’ report from The Australia Institute.  

The reason for such a huge gap is due to the sexism women already have to compete with in the world of work. Men are more likely to earn larger amounts of income and so will reap more of the tax benefits.  

Women make up a larger proportion of those earning in the bottom 40 per cent of taxpayers yet workers in this group only get two per cent of the tax cut. 

Given working women already have to deal with a gender pay gap and are far more likely to retire with less superannuation than men, it doesn’t make sense to implement these tax cuts. 

What’s the alternative?

It turns out most Australians think the Stage 3 tax cuts are a terrible idea. The latest polling from The Australia Institute showed that more and more people support a repeal of the tax cuts – now almost half of Australians. 

A majority of the Australians surveyed would rather the government invest in education and health rather than pursue the stage three tax cuts.  

And fair enough – we have seen unionised teachers, early childhood educators, nurses and midwives all come out in huge numbers this year to demand the government address our flailing healthcare and education systems.  

At the end of the day, it’s a question of priorities. Are tax cuts for the wealthiest really the way the best way to spend taxpayer dollars? 

To put the cost of the tax cuts into perspective, the $17.7 billion price tag is: 

  • A third more than the cost of the childcare subsidy
  • $7bn more than what the government will spend on public universities 
  • 11 years’ worth of funding for the ABC and SBS 
  • 15 years’ worth of funding for Aboriginal and Torres Strait Islander health  

And with wages frozen, or even going backwards, over the past decade, the last thing workers need is to be put further behind.  

With the cost of living getting higher and higher, millions of working people are not able to keep up. 

To fix the wages crisis, it’s time to update our work laws in a way that will benefit millions and especially those on the lowest incomes in Australia.  

We need a pay rise, not unfair tax cuts

What Australians would rather see billions spent on instead of tax cuts for the rich

What Australians would rather see billions spent on instead of tax cuts for the rich