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Stay at home parents left behind by families package

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Media Release - Stay at home parents left behind by families package

Family First Senator for South Australia Bob Day has declared the government’s “families package” as one that leaves stay-at-home parents behind, after his 7 April letter to the government requesting family tax relief appears to have fallen on deaf ears.

“I gave the government notice of Family First’s desire for income splitting in question time last November,” Senator Day said, “I believe within the coalition there is strong support for income splitting so that couples with stay at home parents can address their living costs.”

“For twelve years Family First has consistently advocated for income splitting for families. We are also constant champions of tax cuts, and income splitting can put money back in families’ pockets to spend how they wish - indeed, to spend on child care if they like. With insidious bracket creep shaping as the main means of government budget repair, it is incumbent on the government to fix this family tax travesty. ”

Family First’s proposal would see couples with one primary income earner able to merge their taxable incomes, then split the total in half - and pay tax (after the tax free threshold) on the split income. A couple, say, with a primary income earner at $80,000 and the second at $10,000 would be $5,700 a year better off in retained income. The couple would merge their incomes to $90,000, then split them to $45,000 each. They then pay $6,747 each in tax (total $13,494), whereas the primary earner currently pays $19,147 in tax and the secondary earner pays $0, as they fall within the $18,200 tax free threshold.

“Let me be clear - this would be the first step in family economic reform. Presently the commonwealth taxes families, then discriminates by giving their money back depending on the family’s workplace attendance. In the second step of Family First’s model, reduced national tax income would be offset by reducing various family payments and concessions.”

“I’m also happy to discuss caps on how much income splitting families can save in tax, so it isn’t a windfall for high income earners, and even limit splitting to those raising children - yet to my surprise and regret the government are not interested in talking about it.”

IMAGE: Calculating Taxes Up and Down, by Ken Teegardin, on Flickr

5 May 2015