There is much debate in the national political arena about the stage-three tax cuts, which are due to come into effect in 2024. As a women’s health organisation that is concerned with challenging regional gender inequity – including the gender pay gap, the way women’s work is undervalued in our economy and the gendered impacts of taxation settings – we wanted to look at what the stage-three tax cuts mean for women in regional Victoria.  

And we want to ensure that conversation around these tax cuts focuses on the real issue at hand – people’s lives, and the fact that proceeding with these cuts reflects a policy choice to disadvantage those already most under-served in our communities. 

These tax cuts will entrench inequity in Australia, disproportionately benefit high-income earners – most of them, men – and have a disproportionate impact upon the economic wellbeing of women, particularly regional women. The cuts represent regressive economic policy that not only economically disadvantages the most under-served and marginalised in our communities, but also threatens to undermine the federal revenue base that is available for investment in public services and infrastructure to benefit the common good – services like health, social support and education. 

As such, Women’s Health Goulburn North East calls on those on all sides of politics to support the scrapping of the stage-three tax cuts, and to invest the $243 billion that would then become available to the federal budget during the next 10 years to support those services and infrastructure the pandemic has revealed to be essential to intersectional equity, justice and wellbeing. 

 

But first, what are the stage-three tax cuts? 

The stage-three tax cuts were introduced by the previous federal government and passed with the Opposition’s support in 2019.  

When they come into effect in 2024, the cuts will scrap the $120,000 to $180,000 tax bracket, raise the top tax bracket from $180,001 to $200,001 and implement a 30% tax rate for income between $45,001 and $200,000. This means that Australians earning between $45,000 (which is just $5,000 above Australia’s minimum full-time annual wage) and $200,000 would pay exactly the same tax rate of 30%. 

When these tax cuts are implemented in 2024, they will cost the federal budget more than $243 billion over 10 years.

 

Who are the national winners and losers? 

The stage-three tax cuts will overwhelmingly benefit high-income Australians, with people on incomes over $180,000 set to enjoy $117.6 billion in lower taxes. Those earning less than $60,000 a year (remembering that Australia’s median annual income was $62,868 last year) will collectively enjoy just $2.7 billion in lower taxes, while those earning less than $45,000 – about 40% of Australian taxpayers – will see no benefit at all from the cuts.

“The richest 1% of Australians will get as much benefit from the stage-three tax cuts as the poorest 65% combined.”

– Josh Butler, The Guardian 

Modelling by The Australia Institute demonstrates that a person earning $200,000 a year would receive $174 of tax relief each week, compared to a $2.40 a week tax saving of a person earning $50,000. Men will enjoy almost two-thirds of these tax cuts, or $160.6 billion between 2024 and 2033.6 Meanwhile, women will see $82.9 billion in tax cuts during that period.

 

What do the stage-three tax cuts mean for regional Victorian women and other marginalised communities? 

Regional Victorian women are disproportionately concentrated in the lower income brackets, when compared to regional Victorian men, and Australian women in general. This means that they are less likely to experience the benefits from the stage-three tax cuts than their regional Victorian male counterparts, and the general Australian population. 

Income/week  Regional Victorian women  Regional Victorian men  Victorian women  Victorian men  Australian women  Australian men $400-$499  11.2%  7.7%  9.1%  5.8%  9.2%  6.0% $500-$649  10.2%  6.8%  8.4%  5.7%  8.7%  5.8% $2000-$2999  3.5%  7.2%  5.3%  9.5%  5.5%  9.8% $3500+  1.0%  2.6%  1.8%  4.7%  1.7%  4.7% 

Source: .id Community – Victoria individual income 

In regional Victoria, 11.2% of women earn between $400 and $499/week (compared to 9.1% of Victorian women; 9.2% of Australian women; 7.7% regional Victorian men; 5.8% of Victorian men; 6.0% Australian men); while 10.2% of regional Victorian women earn between $500 and $649/week (compared to 8.4% of Victorian women; 8.7% of Australian women; 6.8% regional Victorian men; 5.7% of Victorian men; 5.8% Australian men).

Meanwhile, only 3.5% of regional women earn between $2,000 and $2,999/week (compared to 5.3% of Victorian women; 5.5% of Australian women; 7.2% regional Victorian men; 9.5% Victorian men; 9.8% Australian men).  

Only 1.0% of regional Victorian women earn more than $3,500/week (compared to 1.8% of Victorian women; 1.7% Australian women; 2.6% regional Victorian men; 4.7% Victorian men; 4.7% Australian men). 

When considering income data using an intersectional lens, we see that: 

• 40% of Australian women aged 15 to 64 with disability have low levels of personal income, compared with 36% of Australian men 
• Only 15% of people (regardless of gender) with disability in outer regional areas have high levels of personal income, compared with 15% in inner regional areas, and 23% of people with disability in major cities 
• 68% of young people aged 15 to 24 with disability have low levels of personal income, compared to 33% of people aged 25 to 64 with disability; and 37% of people aged 65 and over with disability 
• 40% of Indigenous Australians earn incomes in the bottom 20% of income distribution for all Australians aged 18+, compared to 16% of non-Indigenous Australians (2019-20 data) 
• Only 8% of Indigenous Australians earn incomes in the top 20% of the income distribution for all Australians aged 18+, compared to 22% of non-Indigenous Australians (2019-20 data).
  

Data such as this demonstrates the complex interplay of identity categories such as gender, sexuality, race, indigeneity, ability, age, life stage, geography (for example), and their relationships with broader systemic forces such as colonialism, neoliberalism and culture, to “produce shifting relations of power and oppression.”  It demonstrates the importance of applying an intersectional lens to policy such as this, because it reveals how ableism, ageism, racism and colonialism are baked into our economy in diverse and complex ways, having an impact upon the economic opportunity and resources available to different people in our communities. 

To consider the data around regional Victorian women, we see the interplay of gender, sexuality, geography and race, with neoliberal economics, and the way this produces differences in economic opportunity, access to resources, employment and indeed, their interaction with our tax system. 

To examine the experience of regional Victorian women, further, we see that their higher concentration in lower income brackets (compared to regional Victorian men, for example) reflects gendered economic inequities that we see at broader state and national levels. These gendered inequities include: 

• A gender pay gap that sees women earn lower rates of pay to men performing the same work; 
• Structural gender biases and stereotyping that undervalue work traditionally associated with women, and that contribute to the over-representation of women in under-valued and low paid sectors, such as healthcare; 
• Structural gender biases and stereotyping that contribute to the under-representation of women in highly paid sectors, such as construction; 
• Cultural norms and gender stereotypes that contribute to gendered expectations around unpaid caregiving, which see women assume a disproportionate amount of responsibility for unpaid caregiving while receiving inadequate systemic support for these foundational caring activities;
• Cultural norms and gender stereotypes that reduce the opportunities and resources available for women living with disability to determine the nature and extent of the care they use and the ways they choose to engage in employment;
• Lower rates of full-time work and representation in the paid workforce, in general; 
• Structural and unconscious biases that contribute to lower rates of representation of women in senior leadership positions; and 
• Higher rates of gender violence – including harassment and discrimination – at work and in community.
  

It is fair to extrapolate on this data and state that regional Victorian women will either enjoy only modest tax cuts, as a result of this policy decision, if they enjoy any tax cuts at all. Indeed, the stage-three tax cuts will reinforce economic gender inequity experienced by regional Victorian women by advantaging those people in paid work and people with higher incomes, particularly men.  

Further to that, it doesn’t take much stretching of the imagination to recognise that the stage-three tax cuts will further exacerbate the economic inequities visited upon regional Victorian women living with disability or regional Victorian Indigenous women, or other intersectional identity groups experiencing the complex interplay of gender, racism, ageism, geography, migration status, to name but a few examples. 

 

What do the stage-three tax cuts mean for government spending on public services like health and education? 

As if the widening of income inequity in Australia – and regional Victoria – were not enough, following through on the stage-three tax cuts comes at significant cost to the federal budget. It will wipe out $243 billion that might otherwise be available for investment in public infrastructure that is foundational to the health, wellbeing, safety and justice not only of those regional Victorian women mentioned above, but of all Australians. 

The International Monetary Fund recently wrote of the economic benefits that come of investing in public services and infrastructurre like health, aged care, housing, welfare and social support, education, public transport, roads or justice services. 

And though we recognise the significant economic data that exists to support the “business case” for public health expenditure, as an organisation concerned with intersectional equity and our community’s, state’s and nation’s progress towards implementing a wellbeing economy centred on care, we’re much more interested in the social benefits that come from investment in public goods such as health. 

To take health as an example, investment in public health not only benefits individuals, but also the community at large. Public health investment, particularly in preventative health, spells a healthier and more active population, contributes to people’s quality of life, their ability to contribute to and connect with their communities, and feelings of happiness. 

Following through on the stage-three tax cuts represents a deliberate policy choice to divert money, so sorely needed as we continue to grapple with the impacts of the pandemic, away from the federal budget and away from public investment, into the pockets of high-income earners.  

It represents a policy choice to widen the gap between the nation’s rich and poor, between men and women, between those most marginalised by our economic system and those who benefit from the economic marginalisation of others. 

We implore the federal government to reconsider and reverse this decision, in the name of equity and the health and wellbeing of all Australians, but particularly those most under-served in our communities. 

And further to that, we call on the federal government to divert the $243 billion saved by scrapping the stage-three tax cuts to: 

• Improving the pay and conditions of our care workforce, including aged care workers, early childhood education and care professionals, teachers, nurses, GPs and health professionals, those working in the mental health and social/community sectors; 

• Raising the JobSeeker, Parenting and Carer payments to $88 a day, and increasing the Disability Support Pension to enable people to afford the basics of life; 

• Funding Indigenous entities across the country to resource and progress self-determination for First Nations people and communities; 

• Constructing adequate numbers of social housing stock to meet the estimated requirement for 727,300 additional social dwellings across the country, during the next 20 years; 

• Boosting preventative healthcare, including across regional and rural Australia to build the foundation for healthy, safe and equitable lives while reducing the burden on our health system.