Stage-three tax cuts slammed as ‘unconscionable’ as alarming rate of poverty in Australia revealed

The controversial $243 billion tax cut program has suffered another blow, with more calls for the government to scrap it.

Pushing through with planned stage three tax cuts have been slammed as “unconscionable” by social service groups as an alarming new report has revealed that one-in-eight Australian adults are living in poverty.

People in poverty are falling further behind the rest of society with their average weekly incomes dropping to $304 below the poverty line, a report from the University of New South Wales and the Australian Council of Social Service (Acoss).

Yet government support could “swiftly reduce” poverty and the report’s shocking figures should be source of “great shame” for Australia, Acoss CEO Dr Cassandra Goldie said.

“Those stage-three tax cuts are unconscionable in the scale and the way they overwhelmingly benefit people on the highest incomes in the country and overwhelmingly go to the highest income men,” she told The Guardian.

“This report shows some of the greatest rates of poverty we’ve got are in single-parent families and the children in their care – overwhelmingly [single parents] who are women.”

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The stage three tax cuts have been described as unconscionable given the number of people in poverty in Australia. Picture: Getty Images

It comes after the controversial $243 billion program already attracted criticism for delivering tax cuts to “billionaires and the wealthy” and will “turbocharge inequality and widen the gender pay gap”, according to parliamentary research commissioned.

The Australia Institute found a registered nurse on $72,235 will get a tax cut of $681 under the changes while a politician, on a base salary of $211,250, will get a tax cut of $9075.

The stage three cuts create a flat tax rate of 30 cents in the dollar for anyone earning between $40,000 and $200,000.

Meanwhile, 3.3 million adults and one-in-six Australian children, adding up to 761,000 kids, were living below the poverty line in the first year of the pandemic from 2019 to 2020, the Acoss report revealed.

A new report into poverty in Australia has revealed some shocking findings. Picture: Acoss

It showed the temporary increase to government income supports introduced during Covid lockdowns in 2020 pulled 646,000 people, including 245,000 children, above the poverty line.

In the first three months of 2020, as large parts of the economy were shut down by Covid restrictions and thousands were put out of work, the poverty rate soared to 14.6 per cent.

But boosted income support payments announced in April that year saw the poverty rate drop to a 17-year-low over the next three months.

Child poverty dipped to a 20 year low when income support payments were increased. Picture: iStock

The effect of the boosted payments was even more “dramatic”, reducing the child poverty rate to a 20-year low in the June quarter of 2020, lifting 245,000 children above the poverty line.

The extra income meant that single adults receiving social security payments went from being $134 a week below the poverty line in March to $146 above it in June 2020.

Meanwhile, couples with two children went from being $187 below the poverty line to $361 above it at the same time.

However, by April 2021, the extra support of $275 a week was abolished and in its place Jobseeker and related payments were increased by just $25 a week.

There are 3.3 million people in Australia desperately struggling to pay bills and put food on the table. Picture: Getty Images

Professor Carla Treloar, director of the Social Policy Research Centre at UNSW Sydney, said the report highlighted the unacceptable levels of poverty in the country.

“Australia is one of the wealthiest countries in the world, yet we have one-in-eight people and one-in-six children living below the poverty line,” she said.

“There are 3.3 million people in Australia desperately struggling to pay the bills and put food on the table. There are 761,000 children who are denied a good start to life.”

The report defined the poverty line at $489 a week for the household income for a single adult and $1027 a week for a couple with two children during 2020-21.

Yet Jobseeker pays $334.30 per week for a single person.

Dr Cassandra Goldie, CEO of the Australian Council of Social Service. Picture: Supplied

Dr Goldie added the study showed there was a clear way to reduce poverty in Australia. “Almost doubling the Jobseeker rate pulled 646,000 people out of poverty in 2020. That is a huge advance in an incredibly short period of time,” she said.

“The increased payments reduced child poverty by a massive 5.3 per cent, giving 245,000 kids in Australia the chance of a better future.

“The report shows that the solutions to ending poverty in Australia are clear.

“Increasing Jobseeker and related payments to at least $73 a day is a crucial first step, as well as an increase to Commonwealth Rent Assistance and a substantial investment in social housing so that there are enough affordable homes for people on the lowest incomes.

“We must also invest in energy efficiency and solar retrofits for low-income homes.”

The research comes as the government is set to deliver its October budget and faces pressure to shield those on low incomes from the cost of living crisis, although it has ruled out an increase to income support payments at this time.