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Taxes up, while family tax benefits down.

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Wayne Swan MP Shadow Minister for Family and Community Services


Families are on the receiving end of the double whammy of higher taxes coupled with less family tax benefit relief, according to the Mid-Year Economic and Fiscal Outlook (MYEFO) released yesterday.

The Howard Government has again revised down expenditure on family tax benefits, with families expected to receive $254 million less in 2003-20041 than estimated at the time of the May Budget.

However, the underlying reduction is closer to $300 million, as it is partially offset by the Government’s decision to backdate old claims for family tax benefit.

Families are under unprecedented financial pressure.

They are being taxed more than ever before, paying more for their children’s health and education, wrestling colossal mortgage repayments, and are now receiving dwindling family tax benefit relief.

The decline in anticipated family tax benefit spending has also helped bolster the projected $2.4 billion budget surplus boost.

While the $¼ billion reduction in FTB is significant, the reason is far from clear.

The MYEFO suggests higher than anticipated family incomes trigger the clawback.

However, this is contradicted by changes in budget parameters in MYEFO that revise down wages and employment growth2 - two key contributors to family incomes.

Whatever the reason, it is becoming apparent the assistance delivered to families through family tax benefit relief is waning.

The Budget bonanza for the Government helps explain its reluctance to make significant and necessary changes to the system to improve fairness.

Instead, all we have seen are recycled ideas from a recycled Minister.

Senator Patterson should know asking families to forego much needed fortnightly payments and pinning hopes on simplified forms will do nothing to fix the flawed system.

Once again, the Howard Government has demonstrated it is incapable of the reforms required to simplify family assistance and reward families for their hard work and effort.

ENDS Tuesday 9 Dec 03 Web:

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

1 MYEFO 2003-04 Page 23 2 MYEFO Table 3 Page 12