Welcome to the welfare nation: Half of Australia’s families pay no net tax
The welfare mentality is alive and well in this country
HALF of Australian families receive more in handouts than they pay in net income tax, new figures reveal.
As the Abbott government sharpens its budget razor on welfare, the figures reveal just how dependent we’ve become.
The exclusive modelling for The Daily Telegraph by the National Centre for Social and Economic Modelling at the University of Canberra reveals 48 per cent of Australia’s 12.2 million “income units” pay no net tax. Any tax they do contribute is offset by the welfare — pensions, family tax benefits or childcare rebates — they receive.
The analysis also revealed which family types are most reliant on the public purse. The results would shock many Australians, according to NATSEM principal research fellow Ben Phillips.
“Most people rightly or wrongly think they pay too much tax and don’t receive enough benefits,” Mr Phillips said.
“So people might be surprised to learn only about half of Australian families pay more tax than they receive back in benefits.”
As many as 85 per cent of single-parent families contribute no tax, once welfare benefits are deducted. Of single person households — mostly pensioners — 55 per cent pay no tax. About half of couples with no children pay no tax. For couples with children — with adults more likely to be working — one in four families pay no tax.
Research fellow at the Centre for Independent Studies Stephen Kirchner said pension rises should be curbed and Family Tax Benefit Part B abolished in next Tuesday’s Budget as recommended by the audit commission.
On average, Australian families will pay $12,935 in income tax this year but receive $9515 in benefits — a net yearly contribution to the public purse of just $3424.
The figures include welfare paid in pensions, family benefits, jobless support and childcare support. They include all income taxes paid but not indirect taxes, such as cigarette excise and state-levied taxes such as the GST.
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