ACOSS urges Government to trim $8 billion in subsidies
A new report published by the Australian Council of Social Services (ACOSS) has identifies around $8 billion in budgetary savings if the Government clamps down on tax loopholes.
"This will have the effect of moving the Budget towards a surplus, as the Government intends, but will also make our tax system fairer and put us in a much better position to fund essential social services and infrastructure into the future,” Dr Cassandra Goldie, CEO of ACOSS said.
"These include subsidies for ‘gap fees' or other private expenditures for health and community services, such as the Private Health Insurance Rebate from ancillary or ‘extras' cover; the Extended Medicare Safety Net; the Medical Expenses Tax Offset; the Education Tax Refund; and tax deduction for self-education expenses.
The report identifies the following key tax breaks to be curbed:
- Taxing ‘golden handshakes' for departing employees at their marginal tax rates instead of the flat tax rates of 15% or 30% that now apply;
- Removing the Senior Australians (SATO) and Mature Age Workers (MAWTO) Tax Offsets or restricting them to pensioners;
- Removing the extra Capital Gains Tax concessions for small businesses which apply in addition to the 50% discount of tax for capital gains available to individual taxpayers generally;
- The tax treatment of private discretionary trusts be tightened to restrict these tax avoidance opportunities.
“These ‘tax concessions' are a kind of shadow budget. Super tax concessions, for instance, now cost over $30 billion in lost revenue. That's the highest in the OECD and about the same as our spend on the age pension. Yet most of the concessions on compulsory contributions go to the top 20% of income earners, those who are already well placed to secure their retirement future,” Dr Goldie said.
The report can be found here