Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document

 10 TAX SYSTEM

Mr B. P. J. O'Connor, pursuant to notice, moved—That this House:

(1) recognises that, because of the Family Tax Benefit system, parents of middle incomes pay an effective marginal tax rate of between 60% and 77%;

(2) recognises that, because of the Allowances Income Test, an individual claiming Newstart who earns more than $62 in a fortnight pays an effective marginal tax rate of 67%;

(3) recognises that, because of the Allowances Income Test, an individual claiming Newstart who earns more than $150 in a fortnight pays an effective marginal tax rate of 87%;

(4) recognises that, because of the parental income test of Youth Allowance, 40,000 families face effective marginal tax rates of up to 111.5%;


(5) acknowledges that these effective marginal tax rates are much higher than those for persons with high incomes;

(6) notes that the number of individuals facing effective marginal tax rates of more than 60% has nearly doubled since 1997;

(7) calls on the Government to reform the tax, welfare and family payment systems to avoid the development of poverty traps and disincentives to work; and

(8) affirms its commitment to a tax system that is progressive.

Debate ensued.

The time allotted for the debate having expired, the debate was interrupted, and the resumption of the debate made an order of the day for the next sitting.