Tax cuts good news for rich men

Expert modelling shows for every dollar women get, men would get $2.19.

silhouette of a man smoking a cigar

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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    To make a comment, please register or login
    16th Sep 2020
    Better find a rich man then!!
    16th Sep 2020
    The single full pension does not discriminate, male , female the same...

    Now full pension for couples that's where the discrimination comes in BIG TIME
    16th Sep 2020
    Gee why aren't i surprised by these findings.
    17th Sep 2020
    Yep, thats right. There is an old saying which is often still relevant today.

    . The definition of a successful man is one who can earn more than his wife can spend !

    . The definition of a successful woman is one who can find such a man !
    16th Sep 2020
    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.
    On the Ball
    16th Sep 2020
    Never happen mate.
    LNP is there for the rich.
    And the rich make sure the LMNP stay in power.
    Cosy, isn't it.
    Golden Oldie
    16th Sep 2020
    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.
    16th Sep 2020
    Dont forget the golden oldie they pull out..." The trickle down economy"

    That means the rich get richer and the poorer sorry, - eat cake....
    16th Sep 2020
    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!
    16th Sep 2020
    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.

    16th Sep 2020
    The Australian institute in full of greens - enough said
    Horace Cope
    16th Sep 2020
    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.
    17th Sep 2020
    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.
    Old grey
    16th Sep 2020
    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.
    16th Sep 2020
    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.
    16th Sep 2020
    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.
    16th Sep 2020
    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...
    16th Sep 2020
    We shoul;d not be cutting taxes at the present time. Channnel the "benefits of the cuts" to areas of social need - health, aged services, education in areas needed by the economy and in in frastructure so that we can build a better society. We should be telling the government in very clear terms that we are prepared and will vote for them if they do not reduce taxes.
    16th Sep 2020
    The Party's Over. Do away with political parties altogether.

    All government ministers and MPs to be elected as independents on their own merit. Overseen by auditors with powers to sack to ensure accountability. Voted in by public election based on how good they are at the job of running the country.
    16th Sep 2020
    We can wish, BrianP. Would be great if we could somehow make it happen. I would go further and link their salary and benefits to performance, assessed by improvements in the GDP, minimum wage and pensions.
    16th Sep 2020
    Imagine we can ignore the politics for a moment and look at this article. It's a numbers game and a play on statistics. In a way statistics is like a race. Imagine you said everyone can have as much money as they can grab at the finish line. You would have women arguing the race favoured men (because men can run faster). Ok so we think it's fairer to exclude men from the race? We even put the word men in dark letters just in case someone didn't realise how bad men are.
    The tax system and tax rates are a shambles (for men and women)(yes for everyone) and something needs to be done to bring back our competitiveness. But why now?
    There is a pandemic going on etc etc.
    I haven't done my homework so I don't understand the logic of now but I do know one thing. There is no intended men versus women fallout meant, the intention is to bring us (all of us) into a space to be better equiped to match the world.
    16th Sep 2020
    Our pollies are supposed to look after their people, not themselves. Anyone with half a brain would recognise that "trickle down" economics have never worked.
    Anyone who has just looked at economics would know that giving more to the "destitute" would benefit our manufacturing industry because of the increase in consumer demand which in turn would increase profits!!!
    I also understand that there are some on welfare that will just spend any extra on beer and cigarettes but not all.
    Do we have any pollie that has actually tried to live on what they deem sufficient. THAT BEING THE CASE IT IS TIME THEY ACTUALLY TREATED THEMSELVES AS THEY DO THE REST OF US!!!
    16th Sep 2020
    Every where I have worked both sexes are paid the same. Whitlam put this into law around 1974. The discrepancy seems to be when eg a secretary in my office earns $55K, I earn $110K. we both work out of the same space, deal with the same people, but if I don't achieve a monthly target I get sacked. Our turnover is a new salesman every 8 months. New secretary every 8 years. I rarely see a woman take on copier sales. Very tough game, your choice!
    16th Sep 2020
    Every where I have worked both sexes are paid the same. Whitlam put this into law around 1974. The discrepancy seems to be when eg a secretary in my office earns $55K, I earn $110K. we both work out of the same space, deal with the same people, but if I don't achieve a monthly target I get sacked. Our turnover is a new salesman every 8 months. New secretary every 8 years. I rarely see a woman take on copier sales. Very tough game, your choice!
    16th Sep 2020
    Willow your example is what the gender difference is about.
    This situation will change and is changing now. Women are doing what was traditionally done by MORE men (hence the higher average earnings). In a generation there will be no gender pay gap, unless it is women who will be earning higher average wages then men.
    16th Sep 2020
    If you think this is bad we have at least another year before an election they will make it better for them and their mates so you that voted them in stop crying when they got in we with brains in our heads new it and we haven't been wrong the virus certainly came at a good time cover up any one want to do a bit of shooting
    16th Sep 2020
    Cupoftea, I voted for them, only because the alternative was worse. Labor was promising an unmitigated disaster, and displaying complete incompetence and total arrogance. If only we had a viable alternative...
    17th Sep 2020
    Youngagain, you have said that a few times, yet I saw nothing that suggested unmitigated disaster, are you sure you didn't read it in one of the American owned newspapers? - They always come out with this rabid scare tactics nonsense about the labor party just before voting time, - to push the fearful over the edge, - every time!

    Certainly Labor would have had renewables much more advanced now than Morrison, and they could have pushed them a lot further as a result of that so our employment would have been even better, - no doubt they would have used Stimulus, - they virtually invented it in Australia.

    Of course you will vote as you want, but unmitigated disaster, how?
    Dave R
    16th Sep 2020
    Well who's surprised that we get this from a Liberal government.
    Just staying true to form.
    16th Sep 2020
    Yep. Looking after themselves and their mates, not the country.
    16th Sep 2020
    This is so WRONG! It's the lower end of the pay scales that should get any tax cuts, NOT the rich! Americanism again!
    16th Sep 2020
    Define the 'rich'!
    16th Sep 2020
    I smell Bullshit!!
    16th Sep 2020
    Nomad there is no bull from me I started work June 1970 15yrs old I have seen a few things over here and over there
    16th Sep 2020
    Strange when 'they' are lamenting the $250+ billion price tag for Covid-19 when they are still pursuing giving high income earners a $155+ billion tax cut. Does not seem to make sense to me, but then I do not earn anywhere near $200k per annum.
    17th Sep 2020
    In the last election I voted for any independent I could find. I live on the Central Coast which is all Labour dominated. LNP are theives, they leave Neddy Smith and Roger Rogerson for dead. I will never vote Liberal theives again.
    Chris B T
    17th Sep 2020
    Women doing the exact same Job as Men are Paid Less, a big Call when there is Discrimination Laws.
    Could it be doing the exact same Job on Different Shit Patterns and Hours Worked/ time out of work.
    Citing generalisations and not comparing like for like creates this distortion/pay discrepancy. (To satisfy a story line)
    17th Sep 2020
    The is nothing new in the article, but you wouldn't know that by the comments!

    The previous tax cuts did nothing for the economy, except the government then had to keep running up the debt to pay for the services they are supposed to fund.
    The top end was supposed to shower the low paid, but looks like the plumbing needs larger pipes so they receive more than a drip.

    I can't believe how many comments here show their ignorance of the world and the sorry part is they are allowed to vote.
    Come on guys and gals, you seem to be about my age and yet you seem like a mob of troglodytes and need to check the facts before make stupid comments.

    When I joined this site many years ago it had a reasonably educated comments, but I only occasionally visit as their is plenty of other places to obtain similar information that doesn't have such educated comments.

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