Comment: Retirees hurt by tax cuts

Font Size:

On Wednesday, the Australian Senate voted in favour of the full three tranches of tax cuts for Australian workers. Stage one of the tax cuts – for those earning less than $126,000 – would be applied within the next few weeks. Stage two, effective from 2022-2023, involves a combination of changes to income thresholds and tax offsets. Stage three would start in 2024-25 and involve the removal of an entire tax bracket that would deliver big cuts for those with an income close to $200,000.

The total cost to the taxpayer over the next six years is $158 billion.

So what is the background? And what does it mean for retirees?

This is a policy that was taken to the electorate in May by the Morrison Government. And as this Government was re-elected in its own right, it is fair to assume that most Australians approved of all three tranches of cuts. But did retiree voters really consider the ramifications?

Initially opposed in total by the Opposition, under then leader Bill Shorten, more recently a chastised Labor Party argued for the first two stages to pass the House, but for the third stage to be split from the bill as it is beyond the next scheduled federal election.

Labor’s position is irrelevant however, as the Government has an outright majority in the House of Representatives, so the crossbench of the Senate is where the voting power lies. And three senators in particular have now wrangled deals with the Liberal/National Party in return for a yes vote to the full tax-cuts bill. Two Centre Alliance senators have requested a cap on gas prices and received an undertaking this will happen. Independent Senator Jacqui Lambie demanded relief for the $157 million Tasmanian social housing debt and has reportedly received an undertaking that this will be honoured. So, on the promise of receiving these two concessions, the three senators voted in accord with the Morrison Government.

At one level, you could say this is great news for workers, particularly those who will be more than $1000 better off when they file this year’s tax returns. Over time, those earning more will receive even more back.

But what about those on disability benefits, Newstart and the Age Pension?

Nada.

Zip.

Nothing.

And this is where this legislation is so very wrong for our nation. We are spending an eye-watering amount of money to refund tax to some who need it and many who don’t.

But those with the least will receive nothing as they do not usually get tax refunds.

They are not working because they are out of work – many for more than a year. Or they cannot work – most retirees leave the workforce due to ill-health or lack of a suitable job.

The Newstart payment has not increased in more than two decades.

The base rate of the Age Pension has not been increased since 2008.

And with yet another rate cut by the Reserve Bank on Tuesday, pensioners are even worse off as they are deemed to earn far more than market rates deliver. As YourLifeChoices has reported time and time again, the deeming rate has not been lowered since 2015.

Yet older Australians are continually told to hold some assets in cash in case of emergency.

If it wasn’t so serious and, at a cost of $158 billion so eye-wateringly expensive, this decision could be viewed as a farce.

We were told during the recent election that the only party that could be trusted to manage the economy was the LNP.

And so Australians voted it back in.

We are now told that the economy is in dire straits.

Both statements can’t be true. It has either been in safe hands – or it hasn’t.

Well managed or not.

We are also told that the health of this economy is dependent on tax cuts for all workers on low incomes or high incomes, passing as one piece of legislation – the full enchilada – or it won’t get the kickstart it needs.

Yet Anglicare research confirms that the poor are doing it tougher than ever.

And most economists agree that the fastest way to stimulate spending is to give relief to those who have least, as they will spend it immediately on essentials.

So why, oh why, are pensioners not even on the radar when it comes to stimulus packages?

Is it because they are old?

Marginalised?

Or simply don’t matter to our masters in Canberra?

Are you bewildered as to why  pensioners have been left out of this legislation?

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

RELATED LINKS

Will Government finally act on deeming if cash rate cut?

Reserve Bank set to announce whether interest rates will be cut again.

Older Aussies going big on downsizing super contributions

Older Australians downsizing have contributed $1 billion to their superannuation funds.

Self-funded retirees now outnumber pensioners: report

Research strongly suggests that Australia's superannuation system is working.

Written by Kaye Fallick



SPONSORED LINKS

Sign-up to the YourLifeChoices Enewsletter

continue reading

Property

Granny flats - a good idea but beware the baggage

In this extract from Avoiding the Ageing Parent Trap, author and lawyerBrian Herd tells why granny flats have become so...

Health news

Going to sleep later increases the risk of heart disease and death

Sorry, night owls, science says your late-night habits are unhealthy. A recent study concludes those who stay up late have...

Health news

Omega-3 supplements may slow cellular ageing

Do you take omega-3 supplements? Omega-3 fatty acids are essential for your health, especially your heart, lungs, blood vessels, immune...

Health

A neuroscientist's go-to nutrients for brain and memory support

How often do you sit down in front of a meal and think 'wow, this is going to be great...

Activities

Who knew a crossword could do all this?

If you tackled this morning’s crossword, or successfully completed a sudoku, congratulations. Your brain is in a happier place. It...

Seniors Finance

Be a savvier saver with these nine tips

Many people have seen their savings pots wiped out by the impact of the pandemic. At the other end of...

Finance News

Big four banks dragged to court over credit 'rort'

Screaming, dressed in glistening armour and wielding an axe, Aaron Flores has defended the honour of Australia on the battlefield....

Health news

Public toilets are a disease risk

The COVID-19 pandemic has forced more people than ever to consider the potential for airborne particles to damage their health,...

LOADING MORE ARTICLE...