Family benefits cost the Australian taxpayer $20 billion last year and an unacceptably high proportion of that total was directed to families with the means to take care of themselves.
Family Tax Benefit Part B is payable to households earning up to around $176,000, while Family Tax Benefit Part A is designed for both low and middle-income families. The Schoolkids Bonus is another payment for the same purpose as Family Tax Benefit Part A. That is, to ease the financial burden on families by increasing their disposable income.
The system of family benefits is an incoherent mess. For reasons relating to both fiscal prudence and efficiency, our Emergency Budget Repair Kit recommends the abolition of Family Tax Benefit Part B and the Schoolkids Bonus, for a saving of $5.9 billion a year. Family Tax Benefit Part A should also be refocused on people who need it the most: low-income families.
The Australian payments system uses means-testing and we have the most means-tested benefits in the OECD. It's an example that other countries, such as the UK, are following. While the state of our finances is relatively good, spending can still be trimmed further. The means tests for both Family Tax Benefit Parts A and B indicate that money is going to families who earn above the median ($64,168 in 2011). These families should not be a priority for government assistance.
The spending cuts in the Emergency Budget Repair Kit are designed to help fix our budget problems, but reform over the long term is also necessary. With the nation facing the effects of an ageing population and a shrinking tax base, serious thought is needed about the ideal nature of the relationship between taxpayers and the government.
Continuing to tax and spend is not a solution. Not only would it kill growth and prosperity, we would also lose the unquantifiable value of a society that is made up of people in control of, and responsible for, their own lives. The continued indulgence of those comfortably above the bottom end of the income scale with taxpayer dollars has to stop.
Budget emergency or not, making personal responsibility and freedoms front and centre of the political agenda is a vital project.
Trisha Jha is a Policy Analyst at The Centre for Independent Studies.
Home > Commentary > Opinion > Simplify family payments system
Simplify family payments system
Family Tax Benefit Part B is payable to households earning up to around $176,000, while Family Tax Benefit Part A is designed for both low and middle-income families. The Schoolkids Bonus is another payment for the same purpose as Family Tax Benefit Part A. That is, to ease the financial burden on families by increasing their disposable income.
The system of family benefits is an incoherent mess. For reasons relating to both fiscal prudence and efficiency, our Emergency Budget Repair Kit recommends the abolition of Family Tax Benefit Part B and the Schoolkids Bonus, for a saving of $5.9 billion a year. Family Tax Benefit Part A should also be refocused on people who need it the most: low-income families.
The Australian payments system uses means-testing and we have the most means-tested benefits in the OECD. It's an example that other countries, such as the UK, are following. While the state of our finances is relatively good, spending can still be trimmed further. The means tests for both Family Tax Benefit Parts A and B indicate that money is going to families who earn above the median ($64,168 in 2011). These families should not be a priority for government assistance.
The spending cuts in the Emergency Budget Repair Kit are designed to help fix our budget problems, but reform over the long term is also necessary. With the nation facing the effects of an ageing population and a shrinking tax base, serious thought is needed about the ideal nature of the relationship between taxpayers and the government.
Continuing to tax and spend is not a solution. Not only would it kill growth and prosperity, we would also lose the unquantifiable value of a society that is made up of people in control of, and responsible for, their own lives. The continued indulgence of those comfortably above the bottom end of the income scale with taxpayer dollars has to stop.
Budget emergency or not, making personal responsibility and freedoms front and centre of the political agenda is a vital project.
Trisha Jha is a Policy Analyst at The Centre for Independent Studies.
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