ACOSS Media Release Embargoed Until 1am Monday 26 June 2000 NEW ANALYSIS OF GST TAX PACKAGE SHOWS RICH WINNERS & POOR LOSERS An Australian Council of Social Service analysis of new modelling* to be released today at 10am reveals the main winners of the GST tax package as well as the groups most at risk of being worse off. ACOSS President Michael Raper said: "Our main conclusions are that the top 20% of households (those with incomes above $60,000) will make substantial gains and most middle income households will make only modest gains. In contrast, the vast majority of low-income households (those with incomes below $30,000) will only tread water, neither making major gains nor big losses, while many low income households will actually be worse off." "Those worse off include household types shown by the modelling to have very small average gains, or those who have not been specifically modelled." "It is obvious that if a large group of low income households is shown to gain only between zero and 1%, then many within that group will actually be worse off." "Many hundreds of thousands of low income Australians without children who are unemployed, or are in low-paid work, or live in a boarding house or caravan park face a high risk of being worse off. Some middle-income households are also at risk of being worse off. These include couples without children on a single full-time wage of about $30,000 or two low wages." "This analysis is both disturbing and disappointing. It shows that tax reform will not only produce low income losers, but it will escalate income inequality and produce a more unfair Australia. The Government has clearly failed the primary test of tax reform and lost a great opportunity to introduce a tax reform package that would benefit all Australians." HOUSEHOLD GROUPS AT RISK OF BEING WORSE OFF * Unemployed people without children - They are especially disadvantaged by the GST, due to their particular saving and spending patterns. * Single people without children on a low full-time wage (around $20,000 - $30,000) - Their income tax cuts barely compensate for the GST. *Dual income couples without children with one low full-time wage and one part-time wage (with household incomes between $30,000 - $50,000) - Their income tax cuts barely compensate for the GST. *Low-income households living in caravan parks or boarding houses - Their landlords can charge a special 5% GST on their rents, which is not adequately compensated for by increases in Rent Assistance. *Low-income households outside the social security system (eg new migrants, and self employed people without children) - The tax cuts alone will not fully compensate them for the GST, and the proposed $120 safety net payment for this group is inadequate. [Note: This is an analysis of modelling conducted by the National Centre for Social & Economic Modelling (NATSEM) for The Weekend Australian.] __________________ A full copy of the ACOSS Analysis of the "Impact of the Revised Tax Package on Australian Households", ACOSS INFO 212, is available from http://www.acoss.org.au/info/2000/212.htm -- Leftlink - Australia's Broad Left Mailing List mailto:[EMAIL PROTECTED] http://www.alexia.net.au/~www/mhutton/index.html Sponsored by Melbourne's New International Bookshop Subscribe: mailto:[EMAIL PROTECTED]?Body=subscribe%20leftlink Unsubscribe: mailto:[EMAIL PROTECTED]?Body=unsubscribe%20leftlink
