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Rudd tax act leaves vulnerable Australians hanging


Sydney Morning HeraldThe 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 System, the Federal Government now has all the information it needs to work with us to promptly address the barriers faced by people excluded from community life and the labour market, and the constraints faced by the services that support improved social and economic outcomes for disadvantaged and vulnerable Australians.

Much has been said about the capacity constraints faced in the business sector. Both the Review and the Government response paid close attention to this issue. But limited capacity is not only constraining Australia's ability to get commodities to markets, or skilled workers into the resources sector. Australia needs to pay attention to building both economic and social infrastructure to cope with the demographic, environmental and social challenges we face this century.

Families are constrained in their capacity to access flexible work arrangements, quality childcare and affordable transport to work. People trying to move from welfare to work face barriers to accessing relevant education and training and have trouble meeting the costs associated with seeking work from within inadequate income support payments. On top of this they can face effective marginal tax rates of around 70 cents for every dollar earned when they do get into work.

Older people, people living with disabilities and disadvantaged and vulnerable Australians are not able to access all the supports and services they need. Carers and family do not get access to enough assistance to help them sustain their support roles.

Without considerable reform it will be difficult for services to support the growing needs of disadvantaged and vulnerable people and communities across Australian.

Prompt action is needed to address gaps in Australia's social infrastructure and constraints on achieving better social outcomes. Prompt and collaborative action on these issues will demonstrate the Government is going to deliver fully on its ambitious and absolutely necessary social inclusion agenda.


Susan HelyarSusan Helyar is currently National Director of UnitingCare Australia. She is a social worker with experience in policy development and advocacy.

Topic tags: Susan Helyar, UnitingCare Australia, Henry Tax Review, Kevin Rudd, Labor Government



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Existing comments

Superannuation policy is presented as the vehicle of choice to minimise excess costs on future generations of aged care (presenting it as a moral issue).

In truth, this is not a moral issue; to save for retirement is no more than prudence.

Just as we know that we're not getting any younger, we know that our excessive carbon dioxide emissions are driving deleterious future environmental change.

Regardless of Mr Rudd's hyperbolic description, climate change is not the great moral issue of this generation; it is the great environmental issue.

Given this, the greatest single failure of the present Federal government is the imprudence of not creating a consumption tax on fossil fuel ("carbon tax").

Such a tax would have driven the investment in low and zero emission technology and equipment that would have forestalled the otherwise forthcoming devastation.

To not put such tax in place is imprudence.

The proceeds of such a tax could have been used to address issues of poverty and inequity, as Ms Helyar outlines.

Now, that's moral failure.

David Arthur | 03 May 2010  

The welfare cost in Australia is already far too high and all tax buyer pay dearly for one of the most inefficient and discriminatory system in any developed country. The Governments move to increase super contribution is a step in the right direction. It will help more Australians to retire with dignity and it will lessen the demand on taxpayer-funded pensions. The Government has already taken some steps to reduce benefits to people able, but unwilling to work. I agree that more incentives should be given to people willing to find work and willing to remain in the workforce.

I find it however totally stupid to punish the mining industry for its current success. The mining industry provides directly and indirectly for hundreds of thousands of jobs in Australia. The income of the Government is already massive because of taxes paid by these workers employed because of our mining industry, company taxes, capital gains taxes on higher share values, royalties etc. The mining industry is about the only industry that contributes to our national wealth. The mining industry is also high risk. It success depends on global resource demand, currency fluctuations and competition. For many years this industry was struggling and only during the last few years the economies of China, India and Korea have helped the mining industry to prosper. The “mining boom” may not go on forever. If the economic situation in China or India changes, a new crisis in the mining industry will develop. Australia is not the only country with mining resources. If Rudds plan to destroy the mining industry does succeed, countries like Columbia and Indonesia will be very happy to accept new investments in their mining industry.

If Rudd manages to destroy the mining industry to satisfy some loonies of the ultra left of the Labor party, it will be a very hard task to find the resources to fund our welfare system, education and health systems and to improve our infrastructure and to meet environmental challenges.
Only a wealthy country can be generous to the disadvantaged, but Rudd is trying very hard to impoverish our country.

If a farmer has a cow that provides plenty of milk and cream, would he start bleeding the animal? I am sure Rudd would.

Beat Odermatt | 03 May 2010  

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