NFAW 2017-18 GENDER LENS OF THE BUDGET: TAXATION
The changes to taxation in 2017-18 Budget will impact Australian women according to new analysis released by the National Foundation of Australian Women (NFAW).
“Changes to the Medicare levy and the abolition of the Deficit Reduction Levy, will increase the relative tax burden on women and reduce the relative tax burden on men” Professor Miranda Stewart said.
This is because women are concentrated in lower paid jobs, and the flat 0.5 per cent rise in the Medicare levy will increase taxation for all taxpayers above the Medicare levy threshold.
In comparison, women only make up 25 per cent of high income earners currently paying the Deficit Reduction Levy. The lapse of the Deficit Levy means that a person with taxable income of $400,000 per year would get a tax cut worth about $4,000.
“NFAW is recommending that the proposed increase in the Medicare levy is restructured to ensure it is progressive.” Professor Miranda Stewart said.
Alternatives to a flat rate increase could include increasing the Medicare Levy for high income earners; or adjusting personal income tax rates across all income levels to ensure there is no increase in the marginal tax rate (with levy) for low income earners.
In contrast to the impact of personal income tax changes, the proposed bank levy is ambiguous.
“The bank levy may act to redistribute resources between men and women if the burden of the tax falls on investors and borrowers who are more likely to men.” Professor Miranda Stewart said.
“However, the extent to which the banks respond to the levy by cutting employment in the sector will impact women more than men. This is because women account for 55.8 % of the employees in the finance sector.” Professor Miranda Stewart warned.
“The impacts of the taxation changes on women highlight the need for the Government to return to a system of gendered budgeting, and reinstate the Women’s Budget Statement that it abolished in 2014” Professor Miranda Stewart argued.
Full text of the 2017-18 Gender Lens of the Budget can be accessed at our Policy Library. Contact: Professor Miranda Stewart, Phone: 0423 175 883