Gender Bias in Australian Tax Cuts?

Gender is a significant difference in respect to tax cuts as explain by the Guardian.


Men to receive almost two-thirds of Coalition tax cuts after 10 years

Male taxpayers stand to benefit most from the proposed tax cuts, reflecting Australia’s entrenched gender pay gap


small dolls sitting on unequally stacked coins
New analysis shows men stand to gain much more from the Coalition’s proposed tax cuts than women. Photograph: Ink Drop / Alamy Stock Photo/Alamy Stock Photo

A new distributional analysis of the Turnbull government’s income tax cuts shows men will benefit more than women, particularly at the higher end, given their higher-on-average earnings.

New breakdowns prepared by the Parliamentary Budget Office in response to a Labor request show men benefit from the proposed $143bn tax cut package at a ratio of almost two to one, which reflects the entrenched gender pay gap in Australia, and different working patterns between men and women.

In stage three – where the government proposes to flatten the income tax scales, removing the 37% marginal tax rate, so that all income from $41,001 to $200,000 will be taxed at a marginal rate of 32.5% from 1 July 2024 – men benefit at a ratio of almost three to one, with $30bn of the $41.6bn going to male taxpayers.

Labor, which has all but ruled out supporting that part of the package, on Wednesday renewed its demand that the Turnbull government split the income tax cut bill rather than insist parliament pass the measures as a job lot.

Senate crossbencher Tim Storer also confirmed he would not support any element of the package outside the forward estimates, saying it would not be economically responsible to do so.

Storer said he was satisfied that the tax cut for low and middle income earners was affordable, and necessary given wage stagnation. “However, I am not prepared to pass measures commencing from 2022 and 2024 at this time.”

The shadow treasurer Chris Bowen drew attention to the fact that the new PBO forecasts suggest the final stage of the tax cuts will grow at 12% a year. Within 10 years, the Turnbull government’s tax cuts will cost the budget $24bn each year.

Earlier in the day the treasurer, Scott Morrison, decried the new PBO modelling sought by Labor and the Greens, declaring it was “just a joke” to suggest that granular analysis undertaken over a 10-year timeframe was reliable.

Later in the day Morrison told journalists the new distributional analysis was a “nonsense argument” because the tax system didn’t discriminate on the basis of gender. He said the rate of tax paid reflected people’s income, not people filling out “pink forms” or “blue forms”.

“It’s a nonsense argument. I reject it,” the treasurer said.

The benefits of the income tax cuts flowing predominantly to men builds on a range of budget measures in recent years that have had the effect of increasing the effective marginal tax rate paid by women on average earnings, according to experts.

In 2017, the National Foundation for Australian Women warned that a combination of an increase in the Medicare levy, the freezing of family tax benefit rates and earlier repayment requirements for student loans were “particularly harsh for women”.

“Combined, these changes could lead to effective marginal tax rates of possibly 100% or higher for some women, particularly as family tax benefit part A begins to decrease at $51,903,” the foundation’s annual gender analysis of the budget said.

This year, the NFAW said the first phase of the tax cut package, which gives tax relief for low and middle income earners, would benefit women, but it said the government’s proposed tax offset would increase the effective marginal tax rate, which is a disincentive for people to find work.

It said the government should not pursue stages two and three of its income tax cut plan because the proposed flattening of the tax rates “reduces the progressivity of the tax system and represents a major and inequitable turning point”.

The PBO’s distributional analysis of the tax measures shows phase one of the package, which introduces a low and middle income tax offset of up to $530 for individuals with taxable income up to $125,333 for the 2018-19, 2019-20, 2020-21 and 2021-22 financial years, benefits men and women almost equally.

“It means the government effectively has fewer options if there is a downturn … it has less opportunity in the downturn to deliver a short-term tax cut or welfare payment or boost to infrastructure or other forms of fiscal stimulus that would be aimed in that circumstance in promoting employment,” he said.

Daley said the budget measures didn’t fix the problem of bracket creep. He said once the tax plan is fully implemented, some of the tax burden will still shift from the richest income earners to middle income earners.


“Over the next 10 years, assuming the tax plan is implemented, average tax rates will increase for middle income earners by around 4 or 5 percentage points, but will barely move for those in the top 10% of income earners,” he said.

Mohandas Gandhi

“Nobody can hurt me without my permission.”