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Mini-budget biased against families

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C. I. S.


"Last week's Mini Budget continued the Hawke Government's bias against families with children and single income families in particular", the Leader of the Opposition in the Senate, Senator Fred Chaney, said today.

"Its decision to income-test family allowance payments was presented as an attack on so-called middle-class welfare and justified on the basis that the cut-off points would only affect high-income earners", he said.

"In fact it is a tax increase on families with children and a foot in the door to further reductions in the miserably small concessions which exist to help meet the extra cost of caring for children.

"While the income test levels might appear high, there has been absolutely no commitment by the Government to index them. In a very short time inflation will push thousands more families into the phase-out zone and the ostensibly reasonable income test will

extend its reach by stealth."

Senator Chaney, who co-ordinated development of the Opposition's family policy, was speaking at a luncheon organised by the NSW Liberal Party's Women's Council in Sydney.

"The mistake most people make when considering the family allowance is to regard it as a welfare payment", he said.

"The truth is that it took the place of the taxation deduction which used to be claimable by parents with dependent children in recognition of the fact that the economic and social desirability of people having children should be encouraged by some assistance

to meet the extra costs involved.

"It should therefore be seen as part of the taxation system. Moves like that announced in the Mini Budget are simply an extra tax on people with children.

"Labor has been derelict in its treatment of single-income families with dependants. " · " · · ' " e I-,

"The family allowance, and the only other significant concession available from the public purse - the dependent spouse rebate - have not been increased since the Hawke Government came to office and have each lost more than 25 per cent of their real value.



"It was most revealing that a claim on ABC Television on Mini Budget night by ACTU President, Simon Crean, that the unions had a commitment from the Government to increase family allowances . was denied the next day by Senator Button.

"The Institute of Family Studies has calculated that a single-income married couple on $50,000 a year has a disposable income the same as a single person on $23,500, an income level just below average weekly earnings.

"These figures demonstrate how simplistic are many of the calls for a reduction in 'middle-class welfare'.

"Many of these critics simply ignore the reality that raising children is a very expensive business and, if we accept that it is in the national interest to encourage families, we should not be so ready to further disadvantage those Australians with these responsibilities.

"It should also be borne in mind that a single-income family bears a much greater tax burden than a two-income family with the same gross income. Even after the last instalment of tax 'cuts' in July,, a single income family on $50,000 will pay $80 a week more in tax than the two-income family.

"Our new tax policy will recognise these realities and will contain a positive bias in favour of families."

SYDNEY 21 May 1987

Contact: Keith Kessell 09-325 8179