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$436 Centrelink boost: Small tax hike could end poverty for 1 million Aussies

Cash and man in front of Centrelink
By paying a little more tax, we could boost Centrelink payments substantially. (Source: Getty)

One million Aussies could be lifted out of poverty by tweaking the tax system to boost Centrelink payments, a new report has found.

The Australian National University (ANU) has proposed three different policy options to increase welfare payments, all of which could be funded by “moderate increases” to taxes targeted at the most wealthy.

The “high” scenario would see:

  • JobSeeker bolstered by $436 a fortnight

  • Parenting Payment matched to the new JobSeeker rate

  • Disability Support and Carer Pensions boosted by $200 a fortnight

  • Family Tax Benefit Part A increased by 20 per cent

  • Commonwealth Rent Assistance upped by 50 per cent

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These boosted payments would be funded by moderate increases to capital gains tax, a progressive superannuation taxation and indexation to income tax thresholds, according to the report.

The report’s author, ANU associate professor Ben Phillips, said wealthier Australians would not have to sacrifice much.

“Our modelling shows you could make a massive difference to the lives of the bottom 20 per cent of income earners while only making a minimal change to the earnings of the top 20 per cent,’ Phillips said.

“Under our proposed changes, the highest income earners would still retire with very healthy superannuation savings and continue to benefit strongly from their other investments.

“But up to a million people would get their heads above the poverty line.”

Aim high, says Vinnies

The St Vincent de Paul Society, which commissioned the report, called on the Federal Government to adopt the “high” option.

“This would help to lift 1 million people out of poverty and restore their dignity, and in many cases help them move towards re-entering the workforce,” Claire Victory, St Vincent de Paul Society national president, said.

Victory criticised the Government’s recent boost to Centrelink payments in line with inflation that saw JobSeeker increased by a meagre $4 a day.

She is not the only expert to question these increases. Australia Institute’s Matt Grudnoff argued the boost was not enough given the low base rate for the payments.

Victory also said there was nothing in the 2022 Federal Budget to address poverty in the long run.

The Government did, however, hand out one-off cash payments of $250 to pensioners and low-income earners in the 2022 Budget in response to skyrocketing costs of living.

The Greens have also called for an increase to Centrelink payments to make sure all income supports are at least $88 a day.

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