Health care needs a fairer tax system
Wealthy Australians to get tax cuts as hospitals beg for funds.
The Australian Medical Association has warned that public hospitals continue to face a “funding crisis” – one that is rapidly eroding their capacity to provide essential health services.
The warning is contained in the AMA’s 2018 Public Hospital Report Card.
The AMA report card paints a bleak picture of hospital funding and performance.
It notes that federal government health expenditure fell to 16.12 per cent of total expenditure in the 2017–18 Federal Budget – down from 18.09 per cent in 2006-07.
The AMA and NSWNMA have repeatedly warned that without sufficient funding, public hospitals will never meet the targets set by governments, and patients will wait longer for treatment.
The public understand that our hospitals need adequate funding.
In a Guardian Essential Poll (May 2018), most voters chose increased spending for healthcare (67 per cent) as their top priority for the 2018 federal budget.
Only 17 per cent nominated personal income tax cuts as the most important issue for the budget to address.
Yet while hospitals go begging, personal tax cuts that favour the rich were the centrepiece of the Coalition government’s 2018 budget.
According to the Parliamentary Budget Office (PBO) the biggest winners from the tax package when it is fully implemented will be high-income earners:
- A worker on $200,000 will get an annual tax cut of $7225
- A worker on $130,000 will get a cut of $450
- A worker on $60,000 will get an annual tax cut of $540.
Meanwhile, the government continues to allow major corporations to avoid paying billions of dollars in tax every year.
About one-third of large companies failed to pay tax in 2016–17, even though they made a gross profit, ABC News reported in December.
The Tax Office told the ABC most of the 722 (out of 2109) companies that escaped paying tax were able to claim tax losses and concessions that can go back several years.
GetUp campaigns director Ruby-Rose O’Halloran said the ATO data showed successive governments had failed to deal with corporate tax cheats.
“Politicians are surely failing us when nurses, teachers, retail and hospitality workers are all contributing more to society than some of the world’s largest corporations,” she said. “It’s simply not fair.”
Oxfam Australia chief executive Dr Helen Szoke called on the government to “take necessary, tougher measures on tax transparency and the hidden owners of companies and trusts to further crack down on tax avoidance”.
Labor’s Assistant Shadow Treasurer, economist Andrew Leigh said: “Australians don’t want the world’s biggest tax loopholes, they want the best schools and hospitals.”
The Australian entrepreneur and media commentator Harold Mitchell was among many who called for greater efforts to make global companies pay tax in Australia.
“We have just got to get smarter and be able to collect a fair share from the likes of Google, which pays almost nothing on a turnover of $2.5 billion,” Mitchell said.
Where the parties stand on TAX
Implementing income tax cuts in three stages to 2027–28. They will cost the Budget $25 billion per year when completed.
According to the Grattan Institute, $15 billion of the annual $25 billion cost will result from collecting less tax from the top 20 per cent of income earners.
In 2018 the Senate rejected another Coalition plan to give tax cuts to big business.
Labor will implement reforms to “make Australia’s tax system fairer” and save the Budget billions of dollars each year.
Labor will close tax loopholes and reduce tax concessions for negative gearing, capital gains tax and discretionary trusts.
“Our fairer tax system means we can afford to fund better local schools, better local hospitals and better infrastructure for all Australians,” Labor policy says.
The Greens would ensure people earning more than $300,000 pay a minimum rate of tax and are unable to reduce their taxable income to zero.
The Greens have put forward measures to target corporate tax avoidance.
They estimate corporations avoid about $8 billion of tax a year.