This is what democracy looks like
With constituency-based politics, the poor have no voice of their own in the political system, with the exceptions of electorates where the poor make up a very large proportion of the voters. The result: tax cuts for everyone earning over $25,000/year.
Incredibly, the SMH headlined the budget as “Tax cuts for all”, which speaks volumes about that publication. I couldn’t find decent statistics for this, but it seems to me that probably around 20% of households have a gross income below $25,000/year, so probably a rather larger percentage of individuals. Such people are most likely either already eligible for government benefits, or, if they’re not, the probably need them, because they’re students who aren’t eligible for youth allowance because they haven’t proven their independence or immigrants who aren’t eligible to access Centrelink yet (like myself – in the last financial year I earnt around $11,000 and had to pay $750 of that to the government in income tax) or parents and carers who work part-time. Here’s an idea (and it’s not original): let’s raise the tax free threshold to cover everyone who’s in receipt of government benefits, say to $20,000/year. I mean, what insanity is it when Centrelink is giving people money only for the ATO to claw back a small percentage?
As I say, there is basically no reason for either the ALP or the Tories to start giving to these people, since their votes are unimportant under present electoral arrangements. Hypothetically, if these people became politically active, they could extract attention from the major parties, but these people’s poverty is a measure of their marginalisation which prevents them either from representing themselves politically or from attaining higher income levels: they are mentally or physically disabled, with a poor grasp of English, lacking in connections, or just time poor single parents or carers.
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arleeshar wrote:
actually Mark, the ABS houses data suggesting that only about 7.8% of households earned less than 25K in 2003-4.
25K is now less than the minimum wage for an adult working full-time ordinary hours. So in fact all households on less than 25K today are dependent on welfare or are composed of part-time or junior-rate workers.
As I understood it from his speech, Costello fiddled with something called the “low-income tax offset”, to the point where, he claims,
I don’t really understand the practical difference between this and a raised tax-free threshold except for the fact that a quick google tells us that eligibility for the LITO is restricted to Australian citizens, and also one would assume that the offset might come as a lump sum instead of a progressive exemption, but really I have no idea. Does anyone know? I do agree however that the tax-free threshold or whatever the hell they’re calling it should be raised to just below the minimum wage.
Mark wrote:
Incredibly, this was the exact ABS data I used to make my guesstimate, working on the basis of the number of households with a weekly gross income of below $480/week. My call still seems to me to be correct (if not an underestimate) after having reviewed the data, but possibly you are looking at a different table to me, say one which actually give figures for annual income. I hate the fucking ABS.
The LITO point is a good one, but it does seem arcane. I’m not sure you’re right about the Australian citizen bit actually - which I think may mean I’m entitled to another $250 from the ATO for 2005-2006! Breakfast on me if so.
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