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The Forum > Article Comments > Family tax benefits who? > Comments

Family tax benefits who? : Comments

By Mercurius Goldstein, published 3/10/2007

Family tax benefits are a wasteful merry-go-round out of and back into the pockets of middle-class families.

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Jimhaz, dont forget that these family concessions that you are so happy to axe mostly go to the "undeserving poor", who get the full rate of these benefits. As I said, some go to what may be characterised as the lower middle-class, but the amounts are quite nominal. By far the most goes to the low income or no income earners.

The FTB Part B is a replacement of the dependant spouse rebate (in situations where there are children involved). It seeks to provide some parity in taxation rates. Eg a couple earning $90,000 between them say 50/50, pays tax at a marginal rate of 31.5% (taking medicare levy into account). A couple earning $90,000, but with only one income earner, pays tax at the rate of 41.5%. And also doesnt get the benefit of 2 tax-free thresholds. So this was designed to try to bring some level of fairness into the equation, and not to penalise couples based on their relative earnings powers.
Posted by Country Gal, Wednesday, 3 October 2007 5:14:23 PM
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The article itself has some scary numbers in it, but it is the reaction of the posters that is even more interesting. It says much about the phenomenon of familiarity that nobody actually questions whether it makes any sense, in 2007, to have "Family Benefits" of any kind.

If we didn't already have "Family Benefits", would any political party propose them?

What is the intention here? Is it to alleviate financial hardship? If so, surely it could be incorporated into programmes that have this goal as their primary intent? In other words, focus on governing the amount of support provided, but only after the need for support is established. To simply say "here, have some more cash" to people who are already earning $90k seems just a little cavalier.

Or is the intention to encourage Australians to have larger families? That would be a different kind of policy to take to the electorate, and would be just that much harder to justify.

Or is it simply another pork barrel? In which case there will be absolutely no questioning the legitimacy of the hand-out, only on the amount that is sprayed around. There is no chance of review, on the basis that only a mug politician would be so blatant in taking money back, that had already been so visibly given...

This policy mirrors the Blair/Brown conspiracy in the UK, which has increased the number of people who qualify for "government money" (i.e. their own money, recycled through the maw of the bureaucracy) to the majority of the population.

The list includes "people on a low income (employed or looking for work), people who have dependent children, people who are sick or disabled, people who are caring for someone else, people who are aged 60 or over, people who have been bereaved, and those who are pregnant or have recently had a baby." (From direct.gov.uk web site).

For a list from just one department, Workplace and Pensions, go to http://www.dwp.gov.uk/lifeevent/benefits/atoz.asp It's mind-boggling.

Once you have created enough dependents, you don't have to worry about silly things like elections any more.
Posted by Pericles, Wednesday, 3 October 2007 5:42:16 PM
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I would ask "middle class welfare" recipients to have a look around themselves and see how big a house with how many rooms, how many cars, how many stainless steel pidgeon pair fridge/freezers and home theatre systems with 6 foot plasma tellys they really need.

It's beginning to sicken the rest of Australia, hence the unabashed swing to Labour. Even the middle class themselves are becoming embarrased about their own handouts! Amazing!

If you can't raise a two child family on $100,000.00 a year you're spending way too much on things that have nothing to do with raising a family. It's called "sacrifice". They're your children, you had 'em, you look after 'em.

Massage the figures anyway you want, there are far more deserving causes in this country than "The Middle Class".
Posted by Bilbo Baggins, Thursday, 4 October 2007 12:29:19 AM
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It seems to me that the term "middle class welfare" is a pejorative term applied to things you don't like. I had a great reaction from some leftie friends when I asserted that subsidies to the arts, particularly to the ABC, was middle class welfare.

On this basis I would dispute that items such as the baby bonus is middle class welfare. What it is is an incentive. The idea is that the bonus will encourage more people to have children, and the government obviously thinks that it is a good idea for people to have more children. If you don't have any children, you don't get any bonus.

Similar subsidies relating to private medical insurance, private education, superannuation, and anything else that you only receive if you take the action desired by the government, are also not welfare, but incentives. It is not a matter of whether anyone needs them, it is a question whether the subsidy will encourage them to take the action desired.
Posted by plerdsus, Thursday, 4 October 2007 6:30:26 AM
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Its interesting to go back to some of the reasons behind policies and incentives/welfare to examine that the original intention was, and how that has been corrupted over time. The baby bonus was originally intended at encouraging higher income-earning mothers to take a career break to have a child (it only used to apply to the first child, so hence wasnt a "larger family" policy). It was scaled according to the income of the mother (or could be transferred to the father if he ws the main carer), so to refund the tax paid in the year before maternity leave, over a 5 year period. Everyone got the minimum of $500 a year, unless they started earning more than they did originally, but the higher income earners got up to $2500/year for 5 years. It was an equality of opportunity-type policy, so that women who had built a career and were hence earning higher incomes, didnt have to choose between kids and career. Then the yelling fits started about why we target assistance to relatively high income earners and not the poor, and why only for the first child, and why should it matter whether you go back to work or not. So now its been transformed into the baby bonus for each child, available to all. And it no longer bears any resemblance to the tax paid previously by the individual recipient. What started off as a policy about equality of choice has been corrupted into something that is easily attacked as an expansionist policy (and the government has not helped by portraying it that way). Similar would be able to be demonstrated for other such "welfare" policies (the childcare rebate is another very similar example of an equality policy being corrupted because "how dare the poor miss out").
Posted by Country Gal, Thursday, 4 October 2007 4:40:15 PM
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Margate
are you aware that there is in excess of 400 million dollars spent each year on indiginious health care. Considering that the idiginious population is about 1.5 % this equates to $1,333 for each and every one. Not bad when it costs them zip!
rehctub
Posted by rehctub, Friday, 5 October 2007 7:29:13 AM
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