Dignity Must Feature in Tax Reform: UnitingCare

Image: UnitingCare Australia’s National Director Lin Hatfield Dodds says the October tax forum must consider human dignity.

Community service organisation UnitingCare Australia is calling on the Federal Government to consider the dignity of Australians living below the poverty line ahead of next week’s Tax Forum.

Releasing the paper, What price dignity? Equity and entitlement in the Australian tax and transfer system in Canberra today, UnitingCare Australia’s National Director Lin Hatfield Dodds said the treatment of retirement incomes demonstrated the inequity of the current system.

Dodds says the top five per cent of Australia’s income earners attract around $10 billion in superannuation concessions as low-income earners struggle to make ends meet.

She says this group receives more than ten times the support, per person, than the other 95 per cent of people saving for their retirement.

Dodds argues it would be more appropriate to support average retirees expected to have only $100,000 in superannuation and those with none at all.

She says the forum must ask and answer if the current system is fair and reasonable and if Australians are proud of how it redistributes their national wealth.

Putting the case for reform, the UnitingCare paper says the design of the current superannuation tax concessions means that low-income earners, including the millions of people working part-time, caring for others or surviving on disability payments, receive no benefit from taxpayer support of retirement savings.

It says the lack of community consensus on what constitutes a minimum standard of living compounds the problem.

According to the paper, the Association of Superannuation Funds of Australia (AFSA) estimates the costs of a ‘comfortable’ retirement will include;

• Weekly expenditure on restaurant meals and coffee $100
• Annual expenditure on domestic holidays $3,000
• Five yearly cost of overseas holidays $11,000
• Weekly cost of wine with dinner $40

Dodds says while Australians should be encouraged to save for their retirement, low-income earners need assistance to pursue the same goal.

Taxpayers contribute $27 billion a year in tax concessions to help some of the wealthiest Australians accumulate retirement savings, Dodds says.

She says redirecting $10 billion to those who need it most was a revenue neutral reform for equitable support for a broader-cross section of Australians.

Representatives from business and community sectors and unions will attend the Tax Forum at Parliament House on Tuesday and Wednesday next week.

The paper is available at: www.unitingcare.org.au