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Like a thief in the night.

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Like a thief in the night, the Howard Government is trying to strip family tax returns in an effort to disguise the flaws in its two-year-old payments system - a system that saw one in three families hit with average debts of $850 last year.

These are families have played by the rules, informing Centrelink of changes in income throughout the year.

Yet they continue to get debts because the Government’s system punishes families whose actual income differs by as little as 2 or 3 percent from their estimate. It also punishes families where one parent returns to work mid year.

The Howard Government’s decision to strip family tax returns without warning contravenes a public promise given before last year’s election not to do so.

In July last year Senator Vanstone gave the following undertaking:

“The Government has also decided that it would be easier for any family who still had an excess payment to have it recovered by adjusting their future payments, rather than taking it from their tax refund. This is because people may have earmarked their refund for use for specific things”. (Source: Senator Vanstone Press Statement 1 July 2001)

In February this year the Secretary of the Department of Family and Community Services was asked whether this undertaking would be reversed:

Senator Mark Bishop: …will recovery occur automatically through tax returns?

Mr Sullivan: That is a decision that needs to be taken. That is a year-by-year decision, which is subject to the Commissioner of Taxation and me.

Bishop: And that decision has not been made for this year?

Sullivan: No

In July this year Centrelink agreed to recover a Brisbane family’s overpayment through instalments - the way debts were recovered last time. Apparently even they were unaware that the Tax Office was planning to strip the family’s $1,500 tax return.

Only an arrogant Government that is out of touch with the lives of modern families struggling to make ends meet would impose such an unfair system on them.

It’s decision to break a clear commitment before the election not to strip family tax returns and then to do so without any warning is contemptible.

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

ENDS Tues 20 Aug 02 Web:

Contact: Wayne Swan on 0418 795 329 Michael Lye on 0407 012 088