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Parliament passes income tax cuts despite warnings it will hurt services

ACOSS responds to the income tax package, warning that community groups will suffer as the cuts go ahead

Cutting $144 billion from income tax means sacrificing essential funding for services Australian communities rely on, says community group.

Prime Minister Malcolm Turnbull’s tax plan passed the Senate on Thursday, cutting taxes for people earning up to $90,000 a year, with more cuts up to $200,000 in 2014.

“The tax cut package is gambling the future of our medical services, aged care services, disability services and social security payments most of us rely upon at some stage in our life,” Dr Cassandra Goldie, CEO for the Australian Council of Social Services (ACOSS) said.

“Essential services will lose funding because tax cuts have to be paid for.”

ACOSS had previously warned Australian Senators that the government’s decisions to cut $144 billion from income tax would have damaging impacts on the sector’s ability to deliver services.

Goldie said “every person in Australia loses” and the public will now have to pay for services that are universally available.

Under the first three stages in the plan, low and middle income earners will get tax relief of up to $530 a year from July 1 with benefits for people earning up to $200,000 to come into place in 2024. Goldie warns that only high-income earners will benefit.

Goldie also mentioned that no one could know what the economic situation would look like in 2024 when the biggest round of tax cuts go through.

“Promising huge tax cuts six years in advance is foolhardy. Are we fortune tellers? No, and none of us know what will happen to the economy and the budget that far ahead.

“We got into trouble last time a full income tax package was passed. The GFC meant our budget was in the red for a very long time and our essential services suffered.”

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