Health Services Union call to raise tax-free threshold

  • Published September 6, 2022

The Australian, 5 September 2022

Health Services Union national president Gerard Hayes has urged Anthony Albanese to consider raising the $18,200 tax-free threshold to provide more relief for low-income earners as a compromise for sticking with stage three tax cuts.

Mr Hayes said while he accepted the government made an election commitment to follow through on income tax cuts that favour high-income earners, they should be accompanied by reforms that put more money in the pockets of the lower paid.

“I’m wondering whether this is an opportunity to look at different forms of tax cuts or maybe lifting the rate of the non-tax payment,” Mr Hayes said.

“If the tax threshold is lifted, that may go someway to addressing a tax cut overall but also a tax cut directed at pensioners, at younger people and working ­people as well.”

Mr Hayes, who represents health, aged-care and disability workers, said he was confident the government would not renege on its pre-election commitment to retain the final phase of the former government’s plan, which has come under fire for being favourable for the rich at a time of budget restraint.

Mr Hayes was not yet prepared to nominate a new threshold for tax-free earnings, which is currently at $18,200.

Under stage three of the former government’s tax package, every dollar a worker earns between $45,000 and $180,000 would be taxed at no more than 30c. This would eliminate the tax bracket for people earning between $120,000 and $180,000 which is 37c for every dollar earned.

The Prime Minister initially opposed stage three of the package but Labor vowed to make no changes to it at during the election campaign.

On Monday, Mr Albanese distanced himself from the policy, despite maintaining the government had no plans to change it. “That was made under the former government,” he told ABC radio.

The debate over stage three raged as social welfare groups and the Greens criticised the $25 a fortnight indexation increase to the JobSeeker rate.

Greens leader Adam Bandt said people looking for work were remaining below the poverty line while people on more than $200,000 a year would receive an extra $24 a day under stage three tax cuts.

“Labor is giving billionaires and the wealthy $9000 a year while the unemployed and people doing it tough are left below the poverty line,” he said.

“This is a true choice. It is unfair. If there is money to give Clive Palmer a tax cut and billionaires a handout, then there is money to lift people out of poverty.

“Labor is keeping people below the poverty line to fund a tax cut for Clive Palmer and the very wealthy.”

Mr Bandt said the changed economic circumstances since the election had made it palatable for Labor to break its election commitment on the tax package.

“Things are different to what they were before,” Mr Bandt said.

“Wages are going backwards in real terms and inflation is hitting numbers I suspect no one predicted before the election.”

Australian Council of Social Service acting chief executive Edwina MacDonald said the $677 a fortnight JobSeeker payment remained “grossly inadequate to cover essentials”.

“It does not deliver a real increase – an increase above inflation – and that is what people on JobSeeker and other payments need to keep a roof over their head and put food on the table,” Ms MacDonald said.