Catholic Welfare not surprised as tax report overlooks battlers
Catholic Welfare Australia said the Treasurer's tax report released yesterday appears to overlook the disadvantage caused by debilitating effective marginal tax rates for people moving from welfare to work.
Executive Director of Catholic Welfare Frank Quinlan (pictured) said the Report of the International Comparison of Australia's Taxes fails to compare the experience of low income people including the experience of people moving from welfare to work in developed countries.
"The Report does not consider the fact that single parents and people with a disability who combine part-time work with benefits face an effective marginal tax rate of up to almost 80 per cent.
"That means that when you take into account the loss of benefits and concessions, many of Australia's most vulnerable workers will take home just one dollar for every five dollars earned."
He said that further disadvantage is caused by the cost associated with earning an income, such as childcare.
According to The Age, the report found that married mothers returning to work are losing 67 cents out of every dollar they earn to child-care fees and income tax, while sole parents who take a job are hit even harder, pocketing only 32 cents per dollar earned.
"This anomaly undermines the principal aim of the welfare to work legislation which is to increase participation in the paid workforce," Mr Quinlan said.
"We maintain our call for a more comprehensive investigation into Australia's complex, outdated tax system in the lead up to the 2007 election."
The tax report by business leaders Peter Hendy and Dick Warburton also found Australia was the eighth-lowest-taxed country among the developed countries.
No surprises in Treasurer's tax report as battlers are overlooked - again (Catholic Welfare Australia 12/4/06)
Working mothers lose almost 70% of pay to child care, tax (The Age, 13/4/06)
LINKS (not necessarily endorsed by Church Resources)
Catholic Welfare Australia
Reform tax on poor, Catholic welfare chief says (CathNews 16/3/06)
Room at the top for tax cuts: Costello (Sydney Morning Herald 13/4/06)
13 Apr 2006