Social welfare is a very important part of a government’s function, I think. Without it society breaks down and bad things happen.
The reason for social welfare, on a very pragmatic level is that if you don’t look after people, then they become a very big and even more expensive problem for the rest of society. It is also worth remembering one day it maybe you too, also.
So to recap…
Dan Tehan is my Federal member for Wannon, I can vote for him or not, so I try and keep up with what he is saying.
In his opinion piece, Dan Tehan (Australian Financial Review, October 19, 2015) threw around some ideas about taxation. He didn’t state any particular preferences but he did put out some examples that are happening elsewhere in the world.
“In the United Kingdom they have started to cut at the bottom and David Cameron has promised to lift the tax free threshold, the Personal Allowance, to £12,500 by 2020. The aim is to then align the minimum wage with the tax-free threshold, effectively making the minimum wage tax free.”
Then later in the opinion piece he quoted “For those on the minimum wage [in Australia}, which the Productivity Commission puts at $33,327”
So moving on…
So for this premise let’s raise the tax free threshold for the pension, new start (the dole) and Austudy to $33,337 per annum, minimum wage.
So this means that people on a benefit can get work and earn up to $33,337 if they want to.
While still being paid their benefit
The benefit will decrease dollar for dollar if they earn above to $33,337.
People earning over $33,328 should still pay the 19% tax rate for the amount earnt between $33,328 to $37,001. The difference being $3673 per annum with tax payable of $698 per annum or $13.42 per week just to be constant 😉
Anyway here goes…
We will work with new start as an example, the lowest payment is $523.40 per fortnight, $261.7 per week or $13608.40 per year
A) So $33,327 minus the tax free threshold of $18,200 ($33,3270- $18,200) = $15,127
B) If you add $13608.40 the tax free threshold of $18,200 = $31808.4
The difference between the two (A&B) is $1518.6 per year or $29.21 per week.
By encouraging people on benefits to earn up to an additional $19718.60 per year or $379.00 per week they would very likely spend it on living expenses and generate GST tax.
The work commitment for this could mean between 16 to 20 hours of paid work or less depending on the pay rate offered for the work done.
So at $13608.40 the maximum Gst generated by this person would be $1360.84 per year, 26.17 per week.
So at $33,337 the maximum Gst generated by this person would be $ 3333.70per year, $64.11 per week.
That could equate to a maximum of $1970 per year or $37.94 per week additional GST tax revenue per person on benefits. No Dole blugders there, they are paying their way!
Another way to look at it, we could be, (at a maximum) reducing the amount paid out by the government by 14.2% on welfare. Unlikely but a fellow can dream. Even if this amount was half it would be close to what the government spends on National Defence. 1% or 2% saving on the social benefit budget would be amazing.
While this does have some great multiplier effects:-
A better standard of living for those on benefits
Potentially Better health outcomes
Potentially Better education outcomes
More people in work
More money being spent
Lower administration costs for businesses
Lower administration costs for Government agencies
Simplified taxation process
More regular income for the government
There are no tax dodgers
And there are no Dole bludgers/scammers either ! And that was always bullshit anyway, as a society we need everyone.
This post is part of the “My Wannon Electorate Project”. The Democratic process is a two way street. We in Australia are obliged to vote for federal, state and local governments. This is my way to engage with the people who are elected to represent me in the various tiers of Government. @3373 @DanTehan @Louisestanley @MichaelOConnor #3373 #DanTehan #Louisestaley