All Australian families will be aware of the financial challenges that go into raising a family today.
How much does the Australian Government work to ensure that all families – regardless of their choices – experience financial justice in today’s Australia?
(For a more complete history of family taxation, see below…)
The current system financially discriminates against families who make their own choices about how they raise their family – including the use of childcare, who works outside the home and when, and how many children a couple chooses to have.
As just one example, a woman who gives birth to a child will be given (maximum) $13,330.80 (from the Federal Government) in paid maternity leave if she has worked outside the home for a minimum of 10 months during the previous 13 months before the child was born. In additional, she’ll receive a maximum amount of $2,239.86 in the form of the Newborn Upfront Payment and Subsidy (for a first child, otherwise the amount goes down to $1,120.56).
TOTAL: $15,570.66 (first child)
However, if that same woman has not had paid employment outside the home for that period – say if she was caring for an older child or had other duties – she will receive only a maximum total of
$2,239.86 – the Newborn Upfront Payment and Subsidy (again for a first child, amount for second and subsequent children is $1,120.56).
TOTAL: $2,239.86 (first child)
ANOTHER EXAMPLE If a family has both parents doing paid work outside the home, necessitating the use of childcare, they will receive the equivalent of a maximum (approximately) of $799.00 per week in childcare subsidies, per child.
However, if one of the parents chooses to care for their child themselves in lieu of paid employment, and therefore not use daycare, they will not see a penny of that $799.00.
We’re calling for a fairer system.
Our campaign ‘Fair Family Funding’ calls on the Federal Government to implement a system that gives choice back to parents. The amounts in Childcare Subsidies and Paid Parental Leave should be given to **all** parents, regardless of what mode of care they choose to employ for their children.
Click here to hear from fellow parents on how the Childcare Rebate & government provided Maternity Leave has influenced the care of their children.
Click here to read a submission to the Federal Government by a group of university educated parents on the need for economically accurate valuation of parent-provided childcare.
We believe families deserve choice in….
- how they care for their children
- when to have another child
- when or if primary caregiver parents (father or mother) go back to paid work
We invite you to add YOUR name to our petition calling on the Federal Government to implement these changes to create a fairer system for families.
We’ve reached 12 of 500 signatures
Fair Family FundingRead the petition
Don’t forget to sign up to our Australian Family Association email list to hear about all our other campaigns, news and events.
|12||Mrs Joanna M.||Sep 17, 2020|
|11||Ms ALEX L.||Sep 02, 2020|
|10||Ms Marie P.||Aug 05, 2020|
|9||Ms Lucy F.||Jul 28, 2020|
|8||Ms Putu Linda A.||Jul 28, 2020|
|7||Ms Elizabeth A.||Jul 24, 2020|
|6||Ms Gabrielle W.||Jul 23, 2020|
|5||Ms Rebecca A.||Jul 20, 2020|
|4||Mrs Joan A.||Jul 01, 2020|
|3||Mrs Carla S.||Jun 18, 2020|
|2||Mrs Laura O.||Jun 18, 2020|
|1||Mrs Lisa d.||Jun 16, 2020|
A bit of background...
When the United Kingdom introduced income tax in 1799, the incomes of husband and wife were added and taxed as one. Australia, however, since the introduction of Federal income tax in 1915, has always taxed husband and wife separately. This has also applied to children whose incomes have been taxed separately. But separate taxation of family members on their legal incomes ends up violating both of our key principles of taxation—it distorts people’s behavioural choices, and it treats people in similar situations unequally.
Naive individual taxation—taxing individuals solely with regard to the income they legally own or control—fails when tested against this principle because it ignores income transfers. For example, Australia does not tax trustees on the income they control. Instead it allocates the income to the beneficiaries selected by the trustees and the tax liability follows the income.
If one were to apply the same principle to the situation of a family breadwinner, the income which is earned by that breadwinner is to some extent transferred to other members of the family. From this point of view, family taxation is not a question of giving tax relief or a ‘tax subsidy’ to a breadwinner in respect of dependants. The question is more basic—who ultimately enjoys the income?
Most committees of inquiry which have looked into the subject have argued that equitable treatment demands that where two or more people are dependent upon a given income it should be taxed less harshly than when that income is enjoyed by one person alone.
The Irish Commission on Taxation recommended income splitting between spouses, arguing that ‘incomes are shared in practice’ and ‘if the tax system is to be equitable it must recognize this fact’.
The New Zealand Task Force on Tax Reform recommended partial income splitting based on equivalence scales for married couples and the United States Treasury did not question the continuation of joint returns for married couples in its 1984 report on tax reform.
Similarly, Belgium introduced a form of income splitting; and the United Kingdom, while moving away from aggregation as being inequitable, continues to allow tax relief where a husband and wife are dependent upon one income.
Australian families need a more equitable system which offers real choice in the way they organize their working arrangements and domestic affairs. To this end, we have sought to present the case for a new approach to family assistance. We suggest that all childcare payments should be wound into a single, non-discriminatory voucher payment made equally to all families with children, payable on a periodic basis, allowing families to choose their preferred form of childcare for their babies/children.
No society has achieved or ever will achieve 100% labour force participation. Nor should any society aspire to such an objective, especially if it comes at the expense of its future existence, as married women abandon the raising of the next generation as an over-taxed and under-appreciated activity.
There will always be persons dependent upon the sharing of the incomes of those in the labour force. A failure by the tax system to recognise this massive family redistribution of income tends to force those who cannot be supported by the incomes of other family members to enter the paid work force on their own account, quite possibly against their inclinations and at the expense of other socially worthwhile activities.
What do pollies say?
Senator Matthew Canavan, Liberal Senator for Queensland: ‘Given this strong evidence, it is inconceivable that more is not done to help stay-at-home-parent families. That is why, in my submission to the tax white paper, I have proposed that we make some moderate changes to correct the imbalance in the figures that I raised earlier in this speech.
One of the issues that I raised was that, when the tax-free threshold was increased from $6,000 to $18,200 recently, that adversely impacted the relative position of state-at-home-parent families. One potential option is to simply allow all families to have access to two tax-free thresholds so that families, whether they decide to stay at home and look after their children or both parents go into the workforce, do not pay tax before $36,400. That would seemingly be fair. It would not completely correct the imbalance. It would not completely make our tax system neutral, but it would make it a more neutral decision to stay home and look after one’s kids….
A more neutral tax system will help a family have more choice in their work and non-work decisions.’
Read the Senator’s full speech here.
Senator Gerard Rennick, Liberal Senator for Queensland: “For the four years prior to entering parliament, I had the pleasure and privilege of staying home and raising my young children. I know how important it is that parents are with their children at such a young age. There is no greater bond than that between a parent and a child, and it is one that governments should seek to preserve. There is no substitute for mum and dad.
The focus of Government and indeed society shouldn’t be about getting parents back into the workforce as quickly as possible. Rather, we need to make it financially and socially easier for parents, whether that be mum or dad, to choose what’s best for the family… Nobody is saying mum must stay home and raise the kids. It’s about giving parents the choice…
I will always stand up for the rights of parents to choose what’s best for their family.”
Read the Senator’s full media release on this topic here.