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Wednesday, 4 May 1994
Page: 251

(Question No. 1052)


Senator Parer asked the Minister representing the Minister for Social Security, upon notice, on 14 February 1994:

  With reference to the statement by the Prime Minister (Mr Keating) on 8 February 1994 that the department had examined the effects of introducing income splitting for tax purposes between couples with dependent children:

  (1) When was the analysis conducted.

  (2) Who authorised the analysis.

  (3) How much did the analysis cost.

  (4) Will the Minister undertake to table the results of the analysis.

  (5) Is the department undertaking any further studies on the effects of tax policy changes on Australian families.


Senator Crowley —The Minister for Social Security has provided the following answer to the honourable senator's question:

  (1) The analysis was conducted on 2 February 1994.

  (2) The analysis was authorised by the Minister for Social Security.

  (3) The cost of the analysis in salary dollars was approximately $100.00. This marginal cost excludes the cost of computer time and the cost of constructing the original computer model utilised to conduct the analysis.

  (4) Yes. (Note: The analysis relates to couples with and without dependent children).

  (5) At present no further specific studies are being conducted. However, Costings and Modelling Unit within the Department of Social Security has in the past frequently monitored the interactions between the taxation system and the incomes of

Australian families and will continue to do so as the need arises.

  Comparison between the current tax liability and the tax liability incurred if the unit's income is split 50/50 between head and spouse (for married couples).

Number of Families

Increased Tax No Change to Decreased Tax

Liability Tax Liability

Taxable Income (p.a.) (Losers) Liability (Winners)

$0 to less than $5000 151965

$5000 to less than $10000 43657 19997

$10000 to less than $15000 356028 28571 30690

$15000 to less than $20000 355174 21228 60220

$20000 to less than $25000 112983 25572 209235

$25000 to less than $30000 44628 180212 41403

$30000 to less than $35000 195693 33820 233145

$35000 to less than $40000 32364 250967

$40000 to less than $45000 33719 249294

$45000 to less than $50000 47625 29586 176474

$50000 to less than $55000 71316 35192 114024

$55000 to less than $60000 41230 58298 86857

$60000 to less than $65000 2305 50007 106664

$65000 to less than $70000 29538 105256

More than $70000 78172 415531

Totals 1050858 669710 2299757

Average Change in Tax Liability ($p.a.)

Increased Tax No Change Decreased Tax

Liability to Tax Liability

Taxable Income (p.a.) (Losers) Liability (Winners)

$0 to less than $5000 $0.00

$5000 to less than $10000 $0.00 $274.68

$10000 to less than $15000 ($321.26) $0.00 $305.18

$15000 to less than $20000 ($698.56) $0.00 $152.01

$20000 to less than $25000 ($429.54) $0.00 $420.72

$25000 to less than $30000 ($216.78) $0.00 $909.19

$30000 to less than $35000 ($189.87) $0.00 $1,428.26

$35000 to less than $40000 $0.00 $1,695.50

$40000 to less than $45000 $0.00 $1,732.70

$45000 to less than $50000 ($56.55) $0.00 $1,866.62

$50000 to less than $55000 ($72.88) $0.00 $1,730.75

$55000 to less than $60000 ($65.84) $0.00 $2,221.50

$60000 to less than $65000 ($10.05) $0.00 $2,041.18

$65000 to less than $70000 $0.00 $1,862.78

More than $70000 $0.00 $1,932.87

Average ($413.98) $0.00 $1,503.92

Note:

  (i) No change to tax liability has been recorded when the absolute change to tax liability is less than $1 p.a.

  (ii) After the unit's taxable income has been split 50/50 between the head and spouse the Dependent Spouse, Pension and Allowee Rebates have been removed.

  (iii) The increased tax liability for families in the $45,000 to $65,000 taxable income range is due to the loss of the Low Income Rebate.