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Howard Government pockets extra efforts of middle Australia.

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Howard Government Pockets Extra Efforts of Middle Australia

The Howard Government has failed to deliver better incentives for middle Australia to earn more, and for many the situation is worse, a groundbreaking study has revealed.

The study by the National Centre for Social and Economic Modelling (NATSEM)1, is the first comprehensive report card on the reforms targeting families in July 2000.

The study examined the take home benefit of an increase in earnings after the Government’s tax take and claw back of other benefits such as family payments and allowances.

The number of working Australians who lose 60 cents or more of each extra dollar earned has doubled over the last five years a detailed analysis of data presented in the report indicates.

Those who face effective marginal tax rates (EMTRs) of more than 60% has increased by 414,000 over the last five years (400,000 in 1997 to 814,000 in 2002).

The author of the NATSEM report concluded that middle income earners, particularly those with dependent children are most at risk of having their extra earnings pocketed by the Government:

“…74 per cent of all individuals with high EMTRs have at least one child aged under 16 years.” (page 10)

“…those in the middle of the income distribution (deciles 4 to 6) are the ones who mostly face the high EMTRs.” (page 17)

It's little wonder then so many families feel constantly under financial pressure, especially if they try and work harder.

The harder they work the less they get to keep of what they earn.

People take up extra work or a promotion when it’s offered to them because their families need the extra money not because John Howard needs it.

Parents don’t sacrifice family time to give John Howard 60 cents or more of each extra dollar they earn.

1 (Work Incentives Under A New Tax System) copies available from:

Wayne Swan MP Manager of Opposition Business Shadow Minister for Family and Community Services

Middle-income families trying to get ahead have a right to feel completely dudded by the Howard Government who has its hands deeper in their pockets than ever before.

ENDS Monday 04 Nov 02 Web:

Contact: Wayne Swan on 0418 795 329 Matt Linden on 0407 430 613