Tax cuts will hurt Age Pension

Australian welfare groups and peak bodies have banded together to protest the Government’s proposed corporate tax cuts, saying they are “unconscionable” in the face of nationwide poverty.

A letter sent to all Senate crossbenchers on the weekend from groups such as Anglicare, Oxfam Australia, the Salvation Army and the Australian Council of Social Service (ACOSS) opposed the corporate tax cut from 30 per cent to 25 per cent.

The Government aims to reduce the tax rate for companies with a turnover of more than $50 million. Welfare groups are concerned that if these cuts pass, more will be on the way at the expense of welfare payments, social services and pensions.

“We are concerned that already disadvantaged Australians may pay more for health, education and community services,” the letter states.

“We believe that a company tax cut is a mistake while almost three million people live in poverty.

“It is unconscionable to pursue company tax cuts while refusing to raise the rate of Newstart and other allowances.”

ACOSS Chief Cassandra Goldie added: “If the company tax cuts are passed, and personal tax cuts are also given, it is inevitable that social security will be cut further, and we’ll all have to pay more or wait longer for essential services such as doctors’ visits, hospitals, aged care and education.”

“Genuine tax reform would close shelters and loopholes in the tax system which high income-earners and many companies have taken advantage of for years to minimise tax.

“We have a choice. We can pay more for services like hospital care, aged care and home care and continue to tolerate high levels of poverty and  homelessness, or close the revenue gap by making sure everyone pays their fair share – including the many companies and wealthy individuals who take advantage of tax avoidance mechanisms.”

The Government has different ideas, claiming the tax cuts would make businesses more profitable, meaning they would pay more tax, create more jobs and increase wages.

Finance Minister Mathias Cormann said if the tax cuts were not passed in full, Australia would lose investment and jobs, more people would become unemployed and wages would drop over time.

“Less profitable businesses would also pay less tax over time, meaning less revenue available to fund the important and necessary services of government including and in particular in health, education and welfare,” said Mr Cormann.

Labor and the Greens oppose the tax. The Government needs nine of 11 crossbenchers to back its proposed cuts. It already has One Nation in its corner, as well as Australian Conservatives’ Cory Bernardi, Liberal Democrat senator David Leyonhjelm, and independents Fraser Anning and Steve Martin.

What do you think of corporate tax cuts? Are they the answer? Do you fear that social services will foot the bill for the reduced tax money? Or will big business make good on the Government’s claims that it will inject funds back into the economy and solve all our economic problems?

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