The absurdities of John Howard and Peter Costello’s tax and welfare policies are elegantly illustrated by Peter Martin in The SMH today:
Imagine that you were able to (legally) pay no income tax.
You’d feel pretty happy, right? Apparently not. This year an
astonishing 38 per cent of Australian families will pay nothing to the
Government in net terms, and there’s plenty of evidence to suggest
they’re anything but happy.
Let me explain what I mean by no tax “in net terms.” Those families
will, of course, have tax collected from their pay packets through the
PAYE system in the same way most of us do, but they will get all of
that money back and more in the form of Commonwealth Government
payments – in particular the family tax benefit and the new child-care
tax rebate. The income levels at which this can happen are quite
Labor’s Senator Chris Evans has had the Parliamentary Library do the
calculations for a family on a single income with one child in school
and another in child care for 20 hours a week. As reported in The
Australian Financial Review, from the middle of this year when the new
tax cuts come into effect, such a family could earn more than $53,000
and still pay no net income tax.
(The family will, of course, pay GST, which is formally a state tax, and a number of other government charges.)
Naturally it is an offer only available to Australians with children. A
childless couple on the same money would pay $13,000 in tax. The
position for such couples has actually worsened in recent years as
cost-of-living pay rises have pushed more of their income into higher
An unjust system – but why are the winners unhappy? Martin continues:
Obtaining the family tax benefit, worth $10,000 a year to
many parents, has become an exercise in humiliation. New parents whose
financial circumstances are in the process of changing are asked to
estimate their likely income one year in advance.
Millions get it wrong and are hounded like cheats. First there are
polite letters comparing their actual income with their estimate and
asking that some of the benefit be repaid. Then there are urgent
letters demanding that the parents phone the “recovery staff” straight
away. Then high-pressure sales techniques from the recovery staff along
the lines of “don’t tell anyone I told you this, but just for you I can
start the repayments at the low rate of” and “this offer is only
available today. If you ring back tomorrow you will be dealing with
someone else and will have to go back to scratch.”
Peter Costello – for reasons best known to himself – wants to extend this idiotic scheme. He said so very clearly the weekend before last.
Yet this is his modus operandi. Public servants take money from
taxpayers – which eats into the money – gives it to other public servants –
which eats up more money – who give it back to the constituencies you
want to bribe. And a lot of the time things go wrong in the system
which – you guessed it – eats up even more money. There’s efficiency
And who are the lucky beneficiaries of Costello’s largesse and
management skills? Who needs his various tax and welfare breaks? Well,
they include poverty stricken federal ministers and members of the
government. The real underclass.
Here’s a grab from an ABC report on Sunday:
Ms Kelly, a mother of two, says she has found it difficult
to access the child care tax rebate using the current system and more
needs to be done to simplify the process for families.
Then there was this cringe-making performance by Human Services Minister Joe Hockey last month:
Mrs DRAPER (3.19 pm)—My question is addressed to the
Minister for Human Services. Would the minister advise the House of
steps taken to make it more convenient for Australians, and
constituents particularly in my electorate of Makin, to deal with
Centrelink and other human services agencies?
Mr HOCKEY—I thank the member for Makin for her question. I will give it
my best shot. I want to wish the member for Makin a very merry
Christmas and a happy new year. It is the season of goodwill.
Honourable members interjecting—
Mr Murphy—Joe knows it’s Advent!
The SPEAKER—The member for Lowe will remove himself under standing
order 94(a). When the Speaker is on his feet, he will not interject.
The member for Lowe then left the chamber.
Mr HOCKEY—As David Gower said, it is all about timing! As part of the
goodwill of the season, the Minister for Workforce Participation just
had a baby. He complained to me about the form—
Mr Beazley—It’s a miracle!
Mr HOCKEY—It is a Christmas miracle! His wife had the baby, I should
say. But it did not stop the minister from complaining about the form
he had to fill out to claim the maternity payment. We listen to those
concerns on this side of the House. That is why, from March next year,
we are abolishing a form that is nearly 29 pages long and replacing it
with a three-page form and a simple question—so it is easier for people
to claim it. Abolishing those seven million pages of forms is part of
the Christmas present from the coalition to the Australian people…
Hilariously, Dutton looks after the ramshackle Work for the Dole scheme
– the scheme the Commonwealth’s own Auditor General has found does
sod-all in getting people into work, but stops shock jocks talking
welfare bludgers. Yet he’s a welfare bludger.
And Joe Hockey talks about simplifying welfare. How about removing parliamentarians on six figure salaries from the system, Joe?
These people need a hand up, not a hand out. A hand up with their thinking.