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Tax reform a health hazard?

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Media Release


National Rural Health Alliance Inc.

1st Floor, 4 Campion Street

P0 Box 2S0


Phone 102) 6285 4660 Fax: 02) 6285 4670



19 June 1998


Tax Reform a Health Hazard?


Evidence from both Australia and overseas* has shown conclusively that poverty is a health hazard. Whatever the structure of a tax reform package introduced in Australia it therefore has the chance to reduce ill health by reducing the incidence and level of poverty.


If, on the other hand, tax reform increases poverty in Australia it will contribute directly and for many years to ill health and early mortality. Tax reform options should be judged in part on their effect on childhood poverty.


Any shift of the existing tax take from income tax to taxes on consumption will increase poverty among the disadvantaged, including low income earners. ‘Compensation packages' for low income earners are notoriously unreliable. In any case they are not necessary, given the basic fairness of taxes on income, under which those who are most able to pay the most, contribute the most.


An overall change in the ‘tax mix away from income and towards consumption will therefore be opposed by low income families and those who work with them. If there are to be new taxes on consumption they should emphasise goods and services which are purchased disproportionately by people on higher incomes.


When poverty is combined with poor access to services, the situation for health is even more damaging. This is the case for some people in rural and remote areas.


The major influence of poverty on health status lasts for a lifetime. A large time-series study in the UK has shown that children raised in poverty are still in worse health than others of the same age when they reach retirement. Similar studies in Australia show that this country is no different in respect to the influence of poverty on health.


The National Rural Health Alliance is pushing for the major political parties to demonstrate their attention to rural and remote people in the countdown to the Federal election. The tax debate offers the chance for them to improve the health of some of Australia’s most disadvantaged people: those who are poor and who have poor access to public and private sector services.


*“Adverse socioeconomic circumstances in childhood have a specific influence on mortality from stroke and stomach cancer in adulthood, which is not due to the continuity of social disadvantage throughout life. “- BMJ Abstracts, Smith et al.

316 (7145):1631


Further information:  John Lawrence, Chairperson  (0412) 263 843

Gordon Gregory, Executive Dir. (02) 6285 4660 or 6281 3611