20/04/2004 - 22:00

Joe Poprzeczny - State Scene: Give us a break on tax

20/04/2004 - 22:00


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LAST week a statement was released by Australia’s peak welfare lobby agency, the Australian Council of Social Service (ACOSS).

LAST week a statement was released by Australia’s peak welfare lobby agency, the Australian Council of Social Service (ACOSS).

Its president, Andrew McCallum, said an ACOSS investigation found Australia’s “richest income earners get $8.2 billion worth of tax cuts.

“Low-income families continue to struggle while people on high-incomes get a sickening $8 billion free lunch from the Federal Government.

“Imagine what could be done with this money.

 “By tightening these tax rorts, we could significantly improve the Family Tax Benefit for middle and low income families and help the 860,000 children in jobless families.”

Apart from his highly emotive language there’s the question of accuracy.

What Mr McCallum called “tax cuts”, “tax rorts” and “sickening . . . free lunch” aren’t that – they’re tax deductions, like negative gearing, Australia’s Parliament has incorporated into the land’s taxation laws for considered reasons.

He, therefore, does ACOSS and all help-the-poorer advocacy groups a great disservice by using such language.

Mr McCallum fails to realise that while some associated with help-the-poorer lobbying may find such language uplifting, many hard-working, industrious and highly taxed Australians take a contrary view, meaning ACOSS loses respect.

Playing only to his industry’s audience is also counterproductive because most people dislike inaccuracy and fudging of the truth.

ACOSS and its associates certainly have quite legitimate, indeed potentially important, roles to play in highlighting those in need through no fault of their own.

But constantly carping about the so-called rich is, quite frankly, tedious and quite an unhealthy fixation.

State Scene recently met a former acquaintance, now a medium income-earning lawyer employed by a help-the-poorer taxpayer funded legal service.

The lawyer, without giving names, outlined a case of a housewife who worked as a cashier for a large grocery chain – so she draws what was once called the basic wage, in other words, the income each of my parents earned for their entire working lives in Australia.

That woman has a husband who literally won’t go to work. He just sits around the house she can’t afford to leave and is unable kick to him out.

He’s work-shy, or to use a term most West Aussies wouldn’t mind, he’s a lazy bludger.

That indolent individual is literally keeping that woman poor.

Note that she’s not being pauperised by a person who pays a marginal rate of tax of 48.5 cents in the dollar, meaning almost half of every extra dollar he earns over $62,500.

My acquaintance assured me that he encounters many similar cases.

How many lazy bludger living off the earnings of hard-working Australians, including spouses and/or offspring, are there?

Isn’t it time ACOSS highlighted them and the destructive lifelong impact they have on their spouses, offspring and all Australians?

Are there 1,000 such individuals? Or are there perhaps 10,000, or 100,000, or even 200,000? State Scene would like to know.

Even if there are only 5,000 – the size of a substantial town – it’s simply too many. What are such lazy individuals costing highly taxed hard working Australians?

It would be refreshing, and undoubtedly beneficial for the country – as well as many spouses and offspring of such work-shy individuals – if ACOSS and its associated agencies drew attention to such individuals.

State Scene is prepared to keep ACOSS informed – for no charge – on a range of similar issues over an extended period that it and its associate agencies could focus their attention upon.

And such advice wouldn’t overlook employers or politicians, that is, what Mr McCallum appears to relish calling “people on high-incomes [who] get a sickening $8 billion free lunch from the Federal Government”.

A case in point is an issue that well-paid welfare administrators like Mr McCallum and some politicians seem to refuse to focus their attention upon.

It’s the question of Australians who reach their 65th birthday, the so-called retirement age, to perhaps become additions to the nation’s huge, growing and debilitating welfare bill.

As most of us know, Australia’s, and indeed, the Western world’s, population is rapidly reaching the point where there will be more people aged over 65 than below 20.

In coming decades this demographic phenomena will become ever more obvious, costly and burdensome on hardworking younger taxpayers.

Yet it’s precisely the elderly who generally find it difficult to either remain in the workforce or find work.

Has ACOSS ever considered focusing on this question and urging governments to help ensure that those reaching 65 years and wishing to work on be called upon to pay lower income tax levels, rather than joining our huge welfare and mendicant classes?

Much could be done to encourage such people to remain in work.

For instance, tax levels on annual incomes up to, say, $100,000 could, in a person’s 66th year, be struck at 75 per cent of the general level.

This could be lowered to 66.6 per cent in the 67th year, 50 per cent in the 68th year, 33.3 per cent in the 69th, 25 per cent in the 70th, and zero in the 71st and thereafter.

Such persons would, of course, pay the 10 per cent GST and State Government taxes and charges, including their exorbitant stamp duties.

Commensurate incentives (note Mr McCallum, State Scene uses the word “incentive”, one you may refurbish to a “rort”) could be awarded to companies to encourage them to employ those 65 years and over.

Wouldn’t that or a similar scheme be preferable to Federal Treasurer Peter Costello’s idea of re-fashioning superannuation so lifelong contributions to funds cannot be drawn on at once?

The tedious age-old habit of kicking the rich is no substitute for putting your mind to relevant issues, Mr McCallum.



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