There is still a great deal of uncertainty about the benefits and disadvantages of Labor’s tax and family package, announced last week. While there are clear benefits for mothers who want to return to the workforce, some other features of the package appear to contradict or even undermine this intent. The major feature of the package, the combining of Family Tax Benefits A and B is most welcome. It reduces the complexity of the existing family benefits scheme and it removes what had been a clear disincentive for women to return to work after having a baby. The cancelling of all family debts will also be welcomed by those families who are struggling to repay debts which often amount to several thousand dollars. The provision of a limited form of income splitting (via one income families having access to $12,000 worth of tax free income) is apparently intended to counteract any notion that Labor is opposed to stay-at-home Mums but it sets a dangerous precedent. Already, small business advocates are calling for the concept of income-splitting to be applied to more groups and to higher income levels. Also of concern is the treatment of low-income sole parents under Labor’s package. Opposition Leader Mark Latham has made it clear that work is preferable to welfare – a proposition that is hard to argue with. However care needs to be given to the feasibility of some sole parents working, especially when their children are young. Many sole parents live in geographic areas where work is not available. Surely we don’t want to see a continuation of the demeaning and ultimately self-respect destroying policies that currently operate under the government’s “mutual obligation” scheme for sole parents, whereby in return for benefits they must work a certain number of hours a year. If paid work is not available, then “make work” is provided. It is a punitive policy, apparently intended to remind sole parents that wicked people they are, rather than apolicy that encourages sole parents back into gainful employment.
There needs to be much more debate on Labor’s policy, and there needs to be clarification on some of the points raised above. Let’s hope these are addressed in the coming week. You can read the policy document released by Mark Latham and form your own views.
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