Families lose up to $3500 a year in end of mine, carbon taxes
Date
July 5, 2014
Projected annual savings in electricity costs of $550 per household from scrapping the carbon tax may be dwarfed by the withdrawal of up to $3500 per household in other government payments linked to it and the mining tax, according to new research.
The Australian Institute modelling, based on a low-income family with two working adults and three school-age children, has concluded the withdrawal of several payments and offsets associated with the clean energy package and others notionally funded by the Minerals Resource Rent Tax will take away more money than will be saved after the carbon tax is repealed.
The government has convened a two-week session of the Senate from Monday with the prime purpose of repealing Labor's two most unpopular and politically costly taxes, the carbon and mining taxes.
Both repeals were clear Coalition promises before the election but have been blocked in the Labor-Greens dominated Senate.
But with the new Senate, the government believes it has the numbers to dump both taxes and a raft of measures associated with them.
The original version of the mining tax was projected at one point to have been capable of raising up to $12 billion before a series of changes negotiated under extreme political duress resulted in a truncated version, which has raised almost nothing.
So poorly has the tax performed in revenue terms that the Coalition has claimed its repeal, along with the spending programs supposedly funded by it, such as the School Kids Bonus, would actually save the country $13.4 billion.
There appears to be Senate support for removal of the unpopular mining tax, particularly because the Palmer United Party bloc of four votes is lined up with the government.
But less appreciated in the broader electorate is the cumulative cost to families of its removal.
The Australian Institute assessment of the financial impact has tallied this as high as $3500 in one year alone based on a family with three children, one at primary school and two in high school, and where both adults earn just above the minimum wage of $37,000.
The bulk of that loss comes by removing the School Kids Bonus, which, for the above family, is currently about $2050.
That household will also lose $1000 from the repeal of the low income superannuation contribution scheme, which pays $500 to low-income individuals to boost inadequate retirement savings.
Another $456 will be lost by the scheduled $1200 rise in the tax-free threshold next year to $19,400, which will go as part of the clean energy repeal package.
The findings are unlikely to dissuade the government from proceeding with the two repeals, despite last-minute attempts by the opposition and the Greens to frustrate that goal.
A Senate committee was denied a quorum on Friday when Greens and Labor refused to attend the meeting.
The government had hoped to use the changed numbers on the committee to alter its carbon tax repeal bill report date from July 14 to July 7. That would have enabled debate on the repeal to start on Monday rather than a week later.
The government is desperate to have the carbon tax repeal through the Senate in the next fortnight because it has been advised that to delay beyond July means companies have to allow for the tax for up to another year.
Read more: http://www.smh.com.au/national/families-lose-up-to-3500-a-year-in-end-of-mine-carbon-taxes-20140704-3bdvu.html#ixzz36XNeWMO8
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