There’s the problem right there on the front page of today’s Australian and there not a damn thing any politician can do about it with out being nailed to a cross by the other side. And who created this mess? The political class who thought the good times would roll forever and didn’t give a thought to what happens when the music stops.
“…Leah Carr and her husband Steve are a hardworking country couple who forgo holidays to ensure they can afford the modest fees at the independent school their daughters attend.
The couple makes ends meet in a system which churns hundreds of billions of dollars every year between the taxing and spending arms of government. They’re also among the 3.6 million Australian families who receive more in payments from the government than they pay in income tax.
Modelling conducted by the Australian National University Centre for Social Research and Methods shows about 40 per cent of all households are net beneficiaries of welfare but, more dramatically, almost a third of working-age households — 1.9 million — are in the same category.
Ms Carr is looking to return to part-time work but is currently a stay-at-home mother for daughters Meika, 11, Kiah, 8, and Heidi, 5, while her husband travels hundreds of kilometres away from their home town of Bellingen each week as a sales representative, earning $1100 a week and paying $200 in income tax.
When they add up their family budget at the end of each week, they have $101 more in family tax benefits than what they pay in income tax.
The Carrs, who are Nationals voters, feel “blessed” by the assistance. “We are still very tight in every area, more so than we have been when the kids were younger,” Ms Carr said.
“If we didn’t have that (assistance), I don’t think it would be manageable.”
The family also receive the Schoolkids Bonus and use it to buy their children school shoes and uniforms each year.
The couple paid tax for years before they had their children and after raising them they will exit the middle-class welfare that has smoothed their income and become net taxpayers again.
“It is a different phase, people sometimes don’t look at the big picture,” Ms Carr said.
Amy Crocker, 38, and husband Jason, 39, are raising Nicholas and Emily, aged 6 and 3, in Tamworth in northeast NSW.
Ms Crocker earns $28,000 a year as a part-time administrator and her husband about $45,000 in his role as a finance worker at a Catholic charity.
Together they pay about $8500 a year in income tax and receive $5500-$6000 in family payments from the government, leaving them with a tax bill of just more than $2500.
Far from the “nothing” the Labor Party’s election ads make out that families on incomes such as the Crockers receive, the family describes themselves as “comfortable” and happy with the bonus income.
“We take it as a bonus income, and we put a little bit into a savings account for the kids one day,” Ms Crocker said.
What doesn’t go into a savings account becomes spending money for the fun things in life.
“Things like swimming, ballet and karate,” Ms Crocker said.
Under proposed changes to family tax benefit payments, the Crocker family stands to lose about $400 a year, which currently goes to swimming lessons.
In the Howard era of middle-class welfare, families were implored to have children for the nation’s benefit and, in return, rewarded with assistance during the costly years of raising them.
In the past few years, however, governments have begun winding back the handouts — by tightening eligibility to Family Tax Benefits Parts A and B — and the current government plans to reduce the lump-sum end-of-year payouts in stages until they are gone altogether. The shift will bump thousands of families into new territory: that of becoming net contributors to the national Treasury.
According to the ANU modelling, these families are not wealthy by any stretch of the imagination.
The heads of these households are most often aged between 30 and 44, with two young children, and 47 per cent of them are renters.
Renters have a median net worth of $57,000 but those with a mortgage have a median home value of $400,000 and a median net worth of $329,000.
Social Services Minister Christian Porter told The Australian the only issue for government was to ensure it could clear a way for people to come back to work.
“It is important to untangle the tax-and-transfer system to identify and remove welfare-to-work traps so we can get people into jobs,” he said. “The situation is not a problem per se, it reflects the combination of a generous welfare system and an extremely progressive income tax system.
Labor’s families spokeswoman Jenny Macklin said Malcolm Turnbull “is reducing the living standards of low- and middle-income households, and he is still tripling the deficit.”