Tax cuts good news for rich men

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The federal government is considering pulling forward $158 billion worth of personal income tax cuts – originally scheduled for mid-2022 and mid-2024 – to boost the country’s COVID-ravaged economy.

Cause for a celebration?

Yes – if you’re a man. A big yes. And especially if you are a male who earns a big salary.

Men stand to gain more than twice as much as women, according to new modelling released by The Australia Institute on Wednesday, despite women being the hardest hit by lost employment during the COVID-19 recession.

The institute based its research on the following:

  • Total employment in March and April fell 3.9 per cent for men and 5.3 per cent for women.
  • Hours worked by men fell 7.5 per cent, while hours worked by women fell 11.5 per cent.

If stage two of the tax cut is brought forward in the October Federal Budget, for every dollar of tax cut that women get, men will get $2.28, the research found.

If stage two and three of the tax cuts are brought forward, for every dollar of the tax cut that women get, men will get $2.19.

“Despite women facing a bigger impact from the COVID-19 recession, government stimulus has focused heavily on male-dominated industries such as construction,” said Matt Grudnoff, senior economist at the institute.

“Now, our research has shown that bringing forward these income tax cuts will mainly benefit high income earners who, 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.”

Mr Grudnoff wants the government to consider investing in employment intensive industries such as healthcare, aged care and education. He says that would be more efficient than bringing forward the tax cuts by creating more jobs for every million dollars of stimulus.

“We haven’t valued those [caring] industries as highly as some others, despite how terribly important they are, which this pandemic has exposed,” he said. “And, typically, those jobs have lower incomes.”

He also pointed out that these industries employed large numbers of women while government stimulus measures have focused heavily on male-dominated industries such as construction.

Last week, The Australia Institute released modelling showing 91 per cent of the benefit from the 2022 tax cuts would go to the richest 20 per cent of Australians, with the bottom 50 per cent of earners receiving just 3 per cent of the benefit.

Under stage two of the legislated cuts, the 32.5 per cent tax bracket would see an increase in the lower threshold from $37,000 to $45,000, while the lower end of the 37 per cent tax bracket would rise from $90,000 to $120,000.

Stage three would ‘flatten’ the tax scales by abolishing the 37 per cent tax rate and lifting the upper threshold of the 32.5 per cent rate to $200,000.

Greens spokesperson for women Senator Larissa Waters said the institute’s modelling showed the government was “ignoring the structural inequalities facing women”.

“Tax cuts that deliver twice as much for men as women entrench the gender pay gap and won’t secure a fair and sustainable recovery,” she told The New Daily.

“Women have been on the front line of our coronavirus response as healthcare professionals, teachers, childcare teachers, disability carers and aged-care workers. This report confirms that these tax cuts won’t help those women.”

Senator Waters said the Morrison government’s attitude and ideas were mired in the 1950s. “Cutting taxes, digging holes and building roads are tired responses that don’t work as economic stimulus in 2020,” she said.

Would you welcome an early start to the legislated tax cuts? Do you believe the stimulus measures to date have largely benefitted men?

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Written by Janelle Ward

38 Comments

Total Comments: 38
  1. 0
    0

    Better find a rich man then!!

  2. 0
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    All very well the rich men getting a tax reduction. I’ve just been notified by Centrelink that our pension payments after tomorrow the following two payments we’ll receive TWO CUTS to our aged pension. Doesn’t seem hardly fair particularly during these trying COVID-19 times. When are the results of the review being announced, or will it be put on the back burner as the rich men need more money than the bloody pensioner? Typical government and Centrelink rubbish. Time pensions and other government allowances were taken away from Centrelink and a decent review committee appointed to apply fairness to us.

  3. 0
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    Yes it is beneficial to men on high salaries, and will do nothing to stimulate the economy. About as useful as thre past cut in penalty which created 0 jobs. It shows the incompatency of our “brilliant, intelligent” members of parliament. Widh we had a few with commonsense and decency.

  4. 0
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    Here we go again playing the gender card.

    So what is the solution? Give people identifying as ‘women’ higher tax cuts? And whilst you are at it how about giving those same people higher superannuation too? And since you are not allowed to question someone’s declared gender identity, all those identifying as men can declare they are ‘women’ then everyone will be treated ‘equally’ problem solved!

    • 0
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      Yes, KSS, it’s ridiculous to make this a gender issue. It is not. It is an economic issue. That said, despite being generally more inclined to support the LNP (only because Labor usually promises a disaster!), I am appalled at the suggestion of tax cuts at the present time, and I think it is grossly irresponsible to be cutting taxes for the well off. It will not stimulate the economy, and it is patently wrong to flatten the tax scales. The well off benefit disproportionally from the benefits our society offers and therefore SHOULD pay higher rates of tax.

  5. 0
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    The Australian institute in full of greens – enough said

  6. 0
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    What a crock! The quote “There are three kinds of lies: lies, damned lies, and statistics” springs readily to mind. The truth is simple; tax cuts are a percentage of income and it naturally follows that the more you earn, the more tax you pay and if there is a tax cut then those on a higher income will gain more money than those on a lower income.

    What has been said by so called experts about women being disadvantaged with tax cuts is absolute garbage. If one group earns more than another then certainly that group will get a bigger tax cut in money, not as a percentage. This topic has been raised, ad nauseam, in one form or another and it has always been met with the same arguments. All industrial awards in Australia don’t discriminate between men and women because the hourly rates are identical. Those who work outside awards under a negotiated salary are paid an agreed salary that is between employer and employee and is decided on a person’s worth to a company regardless of gender.

    Nobody ever asks those people who are employed as casuals whether they are happy with their employment yet a high percentage of those workers have chosen to be employed that way. Unions keep demanding that casuals be made permanent after a period of time but some businesses and employees prefer the casual structure. Interestingly, the percentage of casual workers to full time workers has remained virtually unchanged since the late 1980’s and is about 20% of the workforce. The erroneous figures are derived from tax returns which doesn’t allow for those who have worked overtime or taken maternity leave. Why is it that Robodebt has been found to be illegal as income from tax returns was used to work out how much someone earned each fortnight but, somehow, income from tax returns is allowed to be used to decide how much someone gets paid per week.

    • 0
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      I take umbrage at your comment “no-one asks these people who are casual whether they are happy”. Easy to see what gender, and side of the fence you are in. My last few years of working, all I could find was casual, short term or contract, in a rural area, in govt positions. No matter how hard we asked, begged, pleaded, or applied, we could not become full time, or even permanent. Yet guys were always employed as permanent, some even being brought in from capital city, at a higher rate. Yet barely any saw out their 12 month contract.
      Even our union said we faced an uphill battle as the area was known for this. Complaining got us no where, except being shown the door, no extension.
      If you haven’t experienced it yourself, please refrain from making such wild, inaccurate sweeping incorrect statements. Believe me, nearly every woman I knew wanted more than casual employment.

  7. 0
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    Based on the government theory of “trickle down” economics. But, if you already earn enough to live a comfortable life style, you’re more likely to either put any extra into savings or buy some expensive foreign import. If the money (or tax reduction) goes to the poorer sections of society, they are more likely to purchase goods and services locally, thus helping local economies (thus “bubble up” economics), but then the rich don’t get richer, and wont therefore support their mates, and keep them in power.

  8. 0
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    Typical of this Government. They’re the reverse of Robin Hood – they take from the poor and give to the rich! Robbing and Hood. Although when I think about it, not entirely so. They didn’t think the whole JobKeeper and particularly JobSeeker debacle through very well. Gave extra money per fortnight to those you’ve never worked a day in their lives and have no intention to and pay JobKeeper to millionaire’s employees who are still working for them. Know a few of those cases. They’re completely incompetent.

  9. 0
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    Scotty and Josh are beating the drum about State borders closed and Victoria’s lockdown needing to be lifted to get the economy running again. They are however giving tax cuts to the rich who will NOT be spending their money in a way that will stimulate the economy.
    I suppose their next step will be to introduce “austerity” measures by cutting government expenditure. They are living in a parallel universe if they think what they are doing will get the result they say they are after. Perhaps they should link their salary and pension to the success of their policies in that if they don’t work they sacrifice their salary and pension.

  10. 0
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    The LNP talks about a mining led recovery … yet these are not labour intensive industries and are male dominated. How about, given the shocking revelations re aged care etc, that such workers (generally female) in that industry be given better training, that centres be given minimum staffing ratios to be observed (as well as employment of more qualified workers) and a new award wage that better reflects their work and responsibilities. This would help reduce the ‘pay gap’… while improving conditions. Stimulate building by providng funding for emergency housing, the construciton of more social housing etc. Benefit those at the other end of the economy…

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