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Rudd tax act leaves vulnerable Australians hanging

  • 03 May 2010

The final piece in the Government's current ambitious reform agenda was put in place yesterday with the release of the Henry Tax Review and the Government's response to that review. UnitingCare Australia contributed several times to this review because taxation is one of the most important tools at our disposal for achieving economic justice and is vital to a flourishing society.

Central to an effective tax system is the premise that people contribute, according to their means, to the wellbeing of the whole community. Australia's tax system needed substantial reform to ensure it supported the Government in fulfilling its responsibility to ensure every citizen has the means to live a decent life and create opportunities for all Australians to belong, contribute and be valued.

But despite the broad sweep of recommendations in Australia's Future Tax System, the Government has limited its response to introducing a new resources tax which will be used to fund a range of superannuation and company tax concessions and infrastructure improvements. All decisions on personal income tax, personal benefits, pensions, housing, welfare and aged care have been postponed, possibly to be announced in the Budget on 11 May or during the election campaign.

I hope the delay in providing a comprehensive Government response to this once in a generation review is not a sign that the Government has lost momentum following the 18-month-long consultation in the lead up to the release of the review. I hope it means the Government is going to work directly with disadvantaged and vulnerable people and the organisations that support them to determine how best to address the critical outstanding issues considered in the review.

Of these issues, the most important are that we: consider how to ensure people living on low incomes, including those on income support, get a better deal out of the tax system; remove anomalies and poverty traps for people moving from welfare to work; and address the sustainability of social services, including how best to ensure adequacy and certainty of funding.

These issues are complex but important. They have been under consideration in numerous forums for years. In fact services across the UnitingCare network, and UnitingCare Australia, have provided substantial analysis and advice to dozens of reviews in the past decade aimed at improving the effectiveness and sustainability of income support and social services in Australia.

With the release of Australia's Future Tax