Blokes win, women screwed by new tax plan

 

Men will secure double the tax cut cash that female workers secure under a budget plan to bring forward tax relief in the wake of the COVID-19 pandemic.

A new analysis of the proposal to bring forward tax cuts early to help stimulate the economy has warned blokes will be the biggest winners but women will miss out.

The reason is based on the simple arithmetic that men tend to earn more than women and are more likely to be high income earners.

But that's raised fresh concerns the tax cut plan is unfair to women who have already been hit the hardest by the COVID-19 pandemic.

The Australia Institute has urged the Morrison Government to reconsider the tax cuts on the basis that many female workers will secure little or no relief from the billions of dollars in cuts that the Treasurer Josh Frydenberg is considering bringing forward to stimulate the economy.

"Bringing forward the tax cuts will mainly benefit high income earning men, with men getting more than twice the benefit of women. This will lead to more gender inequality," Matt Grudnoff, Senior Economist at The Australia Institute said.

"Our research has shown that bringing forward these income tax cuts will mainly benefit high income earners which, in Australia, are overwhelmingly male. Giving tax cuts to the wealthy will have a very limited stimulatory effect on the broader economy, but it will significantly widen the economic divide that already exists between men and women in this country.

"Rather than spending billions of dollars bringing forward tax cuts that mainly go to men on high incomes, the Government could better target that stimulus."

The Australia Institute analysis confirms that for every dollar of tax cut that women get, men get $2.28.

In other words, men get more than twice the tax cut that women get.

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An analysis has found men are set to get more than twice the tax cut women will get under the new budget plan. Picture: NCA NewsWire / Joel Black
An analysis has found men are set to get more than twice the tax cut women will get under the new budget plan. Picture: NCA NewsWire / Joel Black

RELATED: How much you'll save from tax cuts

If the tax cuts were divided between men and women, blokes get 70 per cent of the tax cut cash and women secure only 30 per cent of the tax cut.

The Australia Institute's analysis argues that well targeted stimulus should focus on those most disadvantaged by the pandemic recession.

Unemployment figures have previously confirmed that women were more likely to lose their jobs this year with employment falling in March and April by 3.9 per cent for men and 5.3 per cent for women.

Women were also more likely to lose shifts and working hours than men, in some cases due to the pressure of homeschooling children.

Speculation over the Morrison Government bringing forward benefits has centred on bringing forward the 'Stage 2' tax cuts from 2022 to 2021.

But it's the Stage 3 tax cuts that could prove a hard sell for the Prime Minister because the lion's share of the tax cut cash goes to high income earners.

For example, part-time workers will score a measly $255 per year under the Stage 3 tax cuts the Morrison Government is considering bringing forward, but the wealthy, including Prime Minister Scott Morrison, will ultimately secure a stunning $11,640-a-year windfall.

 

 

Men will get more relief than women under the plans.
Men will get more relief than women under the plans.

 

ANU Associate Professor Ben Phillips has previously told news.com.au that the rich are more likely to stash tax cuts into savings accounts and pay off personal debts including credit cards and big mortgages, rather than spending the money and stimulating the economy.

"We know that people are saving at higher rates than ever. It will have some small impact. But most people would say you get a bigger bang for your buck with tax cuts at the lower income end or welfare,'' he said.

As the Australia Institute analysis notes, despite the discussion about bringing forward the tax cuts, there are no firm proposals for when and how each stage should be used.

Previous Australia Institute modelling has confirmed high income taxpayers are the big winners of Stage 3.

For example, the top 10 per cent of taxpayers would get 52 per cent of the benefit of the tax cuts while the top 20 per cent would get 91 per cent of the benefit.

Those on low incomes get little to no benefit.

The budget will be handed down on October 6 in Canberra.

Originally published as Women screwed by new tax plan

Prime Minister Scott Morrison and Treasurer Josh Frydenberg during Question Time at Parliament House in Canberra. Picture: Sean Davey
Prime Minister Scott Morrison and Treasurer Josh Frydenberg during Question Time at Parliament House in Canberra. Picture: Sean Davey

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