Welfare advocates urge Labor to ditch stage 3 tax cuts

Labor has been presented with a list of the things Australia could buy if the contentious stage 3 tax cuts were dumped.

Australians could access better mental health treatment, children could be lifted out of poverty and aged care homes could be properly staffed if the stage 3 tax cuts were scrapped.

That’s the argument from a coalition of unions and public health and welfare advocates who are urging the Albanese government to ditch the contentious policy in next week’s budget.

Jim Chalmers has already ruled out making any changes to the already legislated cuts in the Albanese government’s first budget, which he will deliver next Tuesday.

The Treasurer has said the government has “more pressing priorities” to consider before the tax cuts come into effect “around three budgets away” in July 2024.

Nevertheless, representatives from the Australian Council of Social Services, the Health Services Union, Anglicare and the Public Health Association came to Parliament House in Canberra on Friday to make their case.

Australian Council of Social Service chief executive Cassandra Goldie said higher income earners “know they don’t need the kind of dollars that are locked into” the cuts when the alternatives included “ending poverty”, building social housing and paying for essential public services.

“It is important to understand that we have half the Australian community who are living on incomes of (less than) $48,000 a year. That is our median income,” she said.

Treasurer Jim Chalmers has ruled out amending the stage 3 tax cuts policy in this month’s budget. Picture: NCA NewsWire / Gary Ramage

Ms Goldie said she was hoping for a “signal” from the government about walking away from the stage 3 cuts in its budget next week.

“It’s to do the right thing, and the right thing is to remove stage 3 tax cuts from the books of the federal budget and put that behind us,” she told reporters.

The third tranche of cuts legislated by the Morrison government with Labor’s support scraps the 37 per cent marginal tax bracket and lowers the 32.5 per cent marginal tax rate to 30 per cent.

It also increases the threshold for the 45 per cent marginal tax rate, so people earning between $45,000 and $200,000 will pay the same 30 per cent tax rate.

The latest Treasury costing of the policy revealed the hit to the budget has blown out by $11bn from $243bn over a decade to $254bn.

Australian Council of Social Service chief executive Cassandra Goldie wants to ditch the policy.

Ms Goldie argued that the money would be better spent on lifting welfare rates, saying the most disadvantaged Australians wouldn’t benefit from the tax cuts yet were being hit hardest by inflation and the corresponding cost of living crisis.

Public Health Association senior adviser Malcolm Baalman said the money saved from reversing the cuts could contribute to funding the National Preventative Health Strategy.

The 10-year plan aims to improve the rates of harm caused by alcohol, obesity, mental health and diseases.

“In May this year, the budget contained no initiatives to expand money on the programs listed in that strategy,” Mr Baalman told reporters.

“And we need to see the government in this coming budget actually take some steps to live out that philosophy.”

Health Services Union assistant secretary Lauren Hutchins said scrapping the cuts would mean the federal government could afford to pay qualified aged care workers higher wages.

Originally published as Welfare advocates urge Labor to ditch stage 3 tax cuts