Australia’s poor will be hit hardest by new tax and welfare policies introduced in Labor’s budget released this week, while the wealthiest will benefit, a worrying new analysis has found.
New simulations examined some of the flagship policies in the the first government budget and showed that the top 20 percent of households with the best disposable income would receive an additional $12 billion a year in 2024-25.
This means high-income couples with children will get a tidy profit $9,763 per year compared to $913 for low-income families.
Overall, each family in the top 20% gets an extra $5,740 a year as a result of paid parental leave jumping to 26 weeks, increased childcare subsidies and the controversial third tax cut.
Meanwhile, the poorest 20 per cent of households will only see an additional $40 million in disposable income in 2024-25, adding a paltry $17 a year, Australian National University modeling has shown.
Those in the 20 percent of households that are couples were shown to receive $4,360 annually, compared with just $3 for those on the lowest incomes.
Shockingly, even a single person in the top 20% would win $3,499, while those in the bottom would win absolutely nothing.
A single parent in the top 20% would also be $6,714 a year better off, compared to just $6 for the lowest-income household.
Combined, the three policies cost more than $20 billion by 2024-25.
The Alphabet Stan Grant put the situation even more bluntly.
“Here’s the harsh reality of the budget: The poor will pay,” he wroteABC News.
“And the dirty little secret is that the government needs them to hurt to get inflation under control.
“Tough? Yes, but it is true of a high inflationary cycle with rising interest rates and a global recession that will soon shrink the job market here and slow our economy. The poor will pay because inflation is a tax on the poor.
“They will have to pay more to keep the lights on, buy shoes for the kids, put fuel in the car and keep the fridge running. God forbid they sometimes want to buy pizza and go to the movies.”
The modeling also showed that the third phase of tax cuts would reduce personal income tax revenue by $18.3 billion in 2024-25, while childcare subsidies would add $1.5 billion to the budget.
The $243 billion tax cut program has previously been criticized tax cuts for “billionaires and the rich” and “will lead to greater inequality and a wider gender pay gap”, according to Greens leader Adam Bandt.
The richest 1% of Australians, and especially men, will benefit as much from the third phase of tax cuts as the poorest 65% combined, according to shocking new analysis.
There have been repeated calls for the government to scrap the tax cuts for the rich, which would cut taxes on $200,000 a year by $9,000.
Originally published as ‘Dirty little secret’: how Australia’s poor have suffered the most