Calls to dump the federal government鈥檚 planned Stage 3 tax cuts are coming from many sectors: economists, unions, women鈥檚 groups, progressive think tanks and welfare groups.
Most objections are based on the regressive nature of the cuts: they will聽widen the gender pay gap聽and exacerbate women鈥檚 financial hardship; they will magnify inequality between rich and poor; and they are not affordable.
The Stage 3 tax cuts announced by聽Treasurer Scott Morrison in 2018 were designed to start from mid-2024.聽The cuts reduce the marginal rates of tax for those earning $45,000 all the way up to those on $200,000. They will disproportionately benefit those on higher incomes.
They will cause a聽$243 billion cut to聽the federal budget over the next 10 years.
Sue Bolton, Socialist Alliance candidate for the seat of Pascoe Vale in the Victorian elections, said the winners will include politicians, chief executives, company presidents and bank managers.
厂丑别听called out聽Labor,聽which initially criticised, but then voted for the bill after the Coalition insisted they be voted for en bloc.
Bolton said Labor must reconsider. 鈥淥ur public services, under huge strain, will not survive without the super rich paying their share. We need to tax the rich to address the crisis in acute health needs for First Nations people, violence against children and women and the necessary energy transition away from fossil fuels.鈥
聽said in 2019 the stage 3 cuts 鈥渇undamentally changes the progressive nature of our tax system鈥. Why should the office cleaner and the CEO be in the same tax bracket, she asked?
For people on incomes of about $15,000 a year (around $300 a week) 鈥斅爐he JobSeeker rate 鈥 paying $50 for anything other than food, transport, rent or energy is prohibitive. Seeing a doctor is not considered essential. For those earning $210,000 annually聽(around $4375 a week)聽spending $50 on anything is small change.
, an independent platform for social policy discussion, said聽poorer households spend nearly 30% more on food as a percentage of overall expenditure than the highest income households, 26% more on housing, 72% more on utilities and 42% more on communications.
Conversely, these households spend 21% less on clothing and nearly 40% less on recreation.
That鈥檚 why a fair tax system needs to be progressive: it is based on the person鈥檚 ability to pay. If Labor continues with the Stage 3 cuts, the regressive tax system will become entrenched.
Some argue the聽Stage 3 tax cuts聽will lead to people spending more, which will lead to more jobs and a boosted economy.
But a boost to spending only happens when those on low incomes can afford to purchase more essentials, or buy items they could not previously afford.
High income earners tend to invest in shares, real estate or buy expensive imported goods, all of which do not boost economic activity in the domestic economy.
Shadow treasurer聽聽criticised the proposed tax cuts in 2019, asking how the Coalition would pay for the hole in the budget. 鈥淚f [the Coalition government] want[s] to commit $95 billion five years out, they need to come clean on what services and programs they鈥檒l cut in the budget to make room for it.鈥
Back then, he said聽the cuts聽would cost聽鈥渞oughly what we鈥檙e spending on aged care or public hospitals this year and more than what we鈥檒l spend on the NDIS. 鈥淚t鈥檚 roughly twice as much as we鈥檒l spend on Newstart [now Job Seeker] or carers and childcare this year,鈥 he claimed.
Chalmers was describing how governments have always remedied big deficits in their budgets: they cut spending on essential services, or they refuse to introduce improvements such as providing free childcare or raising single parent incomes or building more public housing.
Yet the Labor government is about to bring in Morrison鈥檚 Stage 3 tax cuts!
Such cuts will affect women more than men because women are still largely congregated in the lower-paid service and caring professions while the vast majority of high income earners are male.
An independent聽, commissioned by the Australian Greens, found that聽men will take home nearly two-thirds of the benefit of the stage 3聽tax plan between 2024鈥25 and 2032鈥33.
, a policy director at the Centre for Future Work, reported聽on September 1 that the PBO report had found聽the top 1% of income earners, or those earning more than $180,000, will receive the same total benefit as the bottom 65% in 2024鈥25.
That鈥檚 a huge amount to go to just 3.7% of all income earners.
The stage 3 tax cuts are the opposite of what聽PM Anthony Albanese聽likes to claim Labor stands for 鈥 a fairer society.
Socialist Alliance stands for an end to the growing wealth divide and a that benefits the majority of working people and, in particular, disadvantaged groups.
[Mary Merkenich is a teacher unionist and member of .]