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Federal Budget 2014: Australian families receive more welfare than what they pay in income tax



Australian families are believed to be receiving more in handouts than they pay in net income tax, new figures reveal.

Modelling for The Daily Telegraph by the National Centre for Social and Economic Modelling at the University of Canberra shows 48 per cent of Australia's 12.2 million "income units" pay no net tax.

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The results show as many as 85 per cent of single-parent families pay no tax, once welfare benefits are deducted, while 55 per cent of single-person households pay no tax.

Half of childless couples pay no tax and a quarter of families with children also pay no tax, the newspaper reports.

“Most people rightly or wrongly think they pay too much tax and don’t receive enough benefits,” according to NATSEM principal research fellow, Ben Phillips.



Half of childless couples pay no tax and a quarter of families with children also pay no tax, the newspaper reports.



“I guess you have got to keep in mind that about 3.2 million of these 12.2 million families are not of working age, they’re either very young students or the vast majority would be aged pensioners and self-funded retirees — both those groups don’t pay tax,” Phillips said.

However, Stephen Kirchner, a research fellow at the Centre for Independent Studies, said that the idea half of Australian families needed to be beneficiaries of government support was beyond belief.

“Traditionally the purpose of the welfare state was poverty alleviation and helping people who can’t help themselves,” Dr Kirchner said.

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“Whereas now we seem to have shifted more to an entitlement mentality where a lot of government expenditure is designed to make life easier for people who can actually care for themselves.”

According to The Daily Telegraph, Australian families will annually pay nearly $13,000 in income tax but receive $9500 in benefits, leaving a net contribution to the public purse of about just under $3500

 

 Paul Keating calls for longevity tax

Former prime minister Paul Keating is calling for an extra tax levy to supplement the superannuation income of people over 80, the ABC reports.

Mr Keating has told Lateline the existing compulsory superannuation system should have the capacity to cover people aged 60 to 80, but more is needed as Australians continue to live longer.

"We can't try and pretend that like a piece of Indian rubber, we can stretch the (super) accumulation from 65 to 95," he said.

"There's not enough of it now and it can't go for 30 years."

Mr Keating says a so-called longevity levy of 2 to 3 per cent could be pooled to help pay the pension, accommodation and healthcare costs of people aged 80 to 100.

"It's a classic insurance thing.

It's like the houses in the street: you pay your insurance, but only one house burns down.

"What happens? One person dies earlier, but their work and savings subsidises other people who last into their late 90s.