Australia's tax system stacked against these Aussies: report

·3-min read
Close up of an Australian $2 coin on a $50 note
Australia's tax system is stacked in favour of men and against women, new analysis has revealed. (Source: Getty)

Australia’s taxation system is “stacked against'' women, according to new economic modelling, which found that four policies in particular “overwhelmingly benefit high-income, high-wealth men”.

For every dollar that a woman gets from negative gearing, superannuation tax concessions and excess franking credits, two dollar goes to men, new analysis from thinktank Australia Institute revealed.

And for every dollar a woman receives from capital gains tax discounts, $1.50 goes to men, the discussion paper said.

All four tax policies together cost $60.1 billion a year. $42 billion of this is distributed to men, who get more than double of what women receive, at $18 billion.

“Men are the main beneficiaries of these tax concessions,” wrote authors Matt Grudnoff and Eliza Littleton in the paper titled Rich men and tax concessions: How certain tax concessions are widening the gender and wealth divide.

(Source: Centre for Social Research and Methods)
(Source: Centre for Social Research and Methods)

Furthermore, higher-income and wealthier households tend to enjoy the benefits of the four tax concessions: the top 10 per cent of income earners receive nearly 40 per cent of the benefits, while the bottom half of income earners get just 18 per cent of the benefits.

(Source: Centre for Social Research and Methods)
(Source: Centre for Social Research and Methods)

And while men do pay more tax as they earn higher incomes than women on average, men still receive “outsized” benefits from these tax concessions, the authors said.

“That is, they pay 65 per cent of the tax but get 70 per cent of the concessions. For women, it is the opposite: they pay 35 per cent of the tax but only receive 30 per cent of the concessions.”

Tax breaks deepen gender inequality

The tax concessions are another instance of gender inequality experienced by women, exacerbating power imbalances, according to Grudnoff and Littleton.

“These four tax concessions add to both economic inequality and gender inequality,” the report said.

“Scrapping or curtailing these tax concessions would not only reduce inequality but it would also raise billions of dollars that the government could use to further reduce inequality.”

The authors also called for a “comprehensive plan” to tackle all the causes of inequality and for tax concessions to be wound back, which they argued would have real material benefits by raising revenue.

“This revenue could make space in the economy for childcare, crisis accommodation, boosting retirement incomes for those in poverty, just to name a few. There are a multitude of policies and programs that could help reduce economic and gender inequality.”

The Australia Institute senior economist Alison Pennington has previously called for the Government to implement free universal public childcare, which is estimated to create 50,000 new direct jobs and secure 160,000 more.

Opposition Leader Anthony Albanese also announced cheaper childcare as a key policy pillar in Labor’s budget response in October last year.

The Federal Government faced criticism during the pandemic for an economic recovery that disadvantaged women by focusing on infrastructure and construction-related industries that tend to be male-dominated.

“Women have been bearing the brunt of the COVID recession while governments have targeted stimulus spending in bloke-heavy industries,” Pennington said in early March.

The 2021-22 Federal Budget, scheduled to be unveiled in early May, is expected to contain economic policies that will benefit women.

However, some have pointed out that since Tony Abbott’s first budget in 2014, the Coalition Government has failed to produce a gender impact statement.

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