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Time for public scrutiny of new tax package essential



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2 8 -M A Y -1999 1 9 :5 9 FROM ACOSS 61 2 9 3 1 0 4 8 2 2 TO

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A acoss

Media Release Media Contact:

Ian Wilson Mob 0419 626 155.

Australian Council of Social Service

Level 2

619 Elizabeth St Redfern

Locked Bag 4777 Strawberry Hills NSW 2012

Ph [02] 9310 4844 Fax [02] 9310 4822

www.acoss.org.au

DSBORNFIPURI

ACOSS ledia Release Issued: 6.15pm 28 May 1999

Time for public scrutiny of new tax package essential

"The tax agreement between the Government and Democrats will have far reaching effects on the living standards of all Australians — especially people struggling to survive on low incomes. A period of open and full public evaluation including independent modeling must now follow before it is set in concrete."

"ACOSS will assess this revised tax package on the same basis it has consistently used — whether it protects the living standards of low income Australians, improves equity, and strengthens revenue capacity."

"The agreement acknowledges the concerns of the majority of Australians by exempting at least "basic foods”. While ACOSS would prefer a broader and simpler food definition, on first blush this aspect of the agreement, along with improvements in the original compensation arrangements, is a significant win. It will better protect the living standards of low income Australians than a

reliance on compensation alone. But this needs careful evaluation and modelling before any conclusion an be drawn."

"However, the Government and Democrats appear to have taken the "soft option" by raiding more of the Budget surplus in order to pay for the food exemption. This places low and middle income Australians in the firing line for a further round of harsh cuts in social security, health, education, and welfare services down the track."

"In addition, the retention of bank taxes means that ordinary Australians will pay for the GST food exemption at the bank counter — at least for the time being." '

"There are fairer alternatives open to the Government and the Democrats, including adjustments to the 30% tax rate for all taxpayers on $20,000 to $50,000 and firmer action to close income tax loopholes - which mainly benefit high income earners. However, these more equitable alternatives have not been pursued."

"Other outstanding issues in this complex package must be weighed up and assessed. These include: the implications of the agreement for State Government finances, for charities and other community services, for the living standards of families with children, and risks to the integrity of the

income tax system arising from the business tax review."

'This tax reform debate has been running for two and a half years now. ACOSS will not be rushed into praising or condemning this agreement. W e will release a considered assessment in the near future."

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