Income levels - welfare meet reality?

[sydboy007]

This is the latest information I'e been able to dig up on income distribution in Australia.

IMHO welfare should be targeting the bottom 30% with a fairly fast tapering off by around 35%.

I'm not sure how much money a policy like this would save, but I dare say it would be enough to give a reasonable income tax cut to those losing a benefit.

I'm interested to see what others think.

As you can see the $150K battlers with 2 kids are already better off than more than 80% of Australian households.

I really wish this information was more widely available and reported on in the MSM. Maybe then those in the top income levels might start to reconsider their claims on needing welfare? Maybe not. Seems welfare is more a right than safety net these days.

Welfare is not about helping those who've over committed on a mortgage. If it's too much of a struggle then sell and rent. Don't expect handouts to make your life more comfortable, expect a helping hand when circumstance means you need some help in getting back on ya feet.

 

[skc]

IMHO welfare should be targeting the bottom 30% with a fairly fast tapering off by around 35%.

I think you need to make sure that the tapering happening at the correct rate.

You should never have a situation where someone making $50k + welfare is better off than someone making $70k + minimal welfare. It would be a dis-incentive to work harder.

 

[So_Cynical]

This is the latest information I'e been able to dig up on income distribution in Australia.

IMHO welfare should be targeting the bottom 30% with a fairly fast tapering off by around 35%.

I'm not sure how much money a policy like this would save, but I dare say it would be enough to give a reasonable income tax cut to those losing a benefit.

I'm interested to see what others think.

As you can see the $150K battlers with 2 kids are already better off than more than 80% of Australian households.

Agree 100% ~ the 150K+ family's don't need any support at all and should be almost completely cut off...even above 100K welfare should be almost non existent.

 

[fiftyeight]

+58

Could not agree more.

I am sick of "working families" getting hand out after hand out. If you choose to pump out a few kids then you choose to forgo some of the luxuries in life that I enjoy because I choose not too have kids.

Obviously there needs to be a safety net for true battlers, but it is amazing how many "working families" have huge houses, 2 cars, huge TVs, take trips to Bali, gamble, smoke, drink, have foxtel ... and then complain about cost of living.

I enjoy many of these luxuries and enjoy many of them to excess as I can afford them because I do not have kids yet.

Cr@p vote buying policy at its worst.

For context I lived in state housing for a number of years as a child, have a HECS debt and I am generally left thinking.

 

[chiff]

The aim should always be to look after the needy,not the greedy.

 

[sydboy007]

Agree 100% ~ the 150K+ family's don't need any support at all and should be almost completely cut off...even above 100K welfare should be almost non existent.

A 100K family with two kids will already be better off than ~58% of similar families. If you're in top half of the income ladder should you really expect welfare?

What i'd like to know is when people look at the income ranges and how far up the ladder they are / aren't do they find it surprising? I dare say the 100K family probably thinks they're avg but they're doing a lot better than most.

We need political leadership that can somehow get this information across to the public in a way that protects them from the slings an arrows of the MSM / opposition / vested interests / rent seekers. It's all too easy for this to devolve into "class warfare" or politicians being out of touch (oh they are when looking at the poorest).

I remember when I was young and my dad told me it cost $17K (1973) to buy the land and build the house we lived in. I was like that's so cheap. I asked him "Why didn't you borrow more and build a bigger house?" He said because they couldn't afford it and didn't want more debt than what a single wage could support. That message stuck with me to this day. I think it's something a lot of households out there need to learn.

 

[pixel]

it is amazing how many "working families" have huge houses, 2 cars, huge TVs, take trips to Bali, gamble, smoke, drink, have foxtel ... and then complain about cost of living.

That has also been puzzling me for quite some time. But I believe I've got an answer:
The MSM ignore it, just like the major parties ignore it because if the $100K+ families didn't waste so much money on Foxtel, smokes, and home entertainment gizmos, poor Rupert and Gerry and ... couldn't make as much money for selling them the stuff; neither could the ATO rake in the extra GST and tobacco excise and gambling profits and ...
That was already evident when Johnny H paid under-aged "mothers" the Harvey Norman - oops!: baby - bonus.

 

[moXJO]

This is the latest information I'e been able to dig up on income distribution in Australia.

IMHO welfare should be targeting the bottom 30% with a fairly fast tapering off by around 35%.

I'm not sure how much money a policy like this would save, but I dare say it would be enough to give a reasonable income tax cut to those losing a benefit.

I'm interested to see what others think.

As you can see the $150K battlers with 2 kids are already better off than more than 80% of Australian households.

I really wish this information was more widely available and reported on in the MSM. Maybe then those in the top income levels might start to reconsider their claims on needing welfare? Maybe not. Seems welfare is more a right than safety net these days.

Welfare is not about helping those who've over committed on a mortgage. If it's too much of a struggle then sell and rent. Don't expect handouts to make your life more comfortable, expect a helping hand when circumstance means you need some help in getting back on ya feet.

On the bottom table that is after tax isn't it?
So does that mean $150k pa they are closer to better off then 66-75%?

 

[drsmith]

IMHO welfare should be targeting the bottom 30% with a fairly fast tapering off by around 35%.

While this is simplistic in terms of the types of income support presently available from government, it still raises an interesting question.

If it's a reference to means tests, what EMTR do you feel is appropriate for those within the taper ?

 

[sydboy007]

On the bottom table that is after tax isn't it?
So does that mean $150k pa they are closer to better off then 66-75%?

Top table is pre tax, bottom table after tax

- - - Updated - - -

While this is simplistic in terms of the types of income support presently available from government, it still raises an interesting question.

If it's a reference to means tests, what EMTR do you feel is appropriate for those within the taper ?

I don't know how we overcome the issue. I've not read anything that adequately deals with it either. Do you have a better idea on how to target Govt support?

The current system of providing support to people in the upper income levels is just wrong and wasteful and sends the wrong message.

Maybe a new slogan to our Dear Leaders

Welfare is a safety net, not a right.

Probaby not many votes in it though.

 

[moXJO]

The whole tax system needs an overhaul rather then the tinkering that seems to lead to further problems. I'm sure I read or posted something on Australia would be the highest taxing nation if not for the middle class welfare.

 

[sydboy007]

The whole tax system needs an overhaul rather then the tinkering that seems to lead to further problems.

You're right, but I'd say it can only be done with bipartisan support.

Abbott has shown the politics of fear and negativity are potent, so I don't expect to see Labor support any meaningful taxation reform. Why would they when they'll be able to demonise Abbott for every cut he makes, just as he did in oppositon.

 

[drsmith]

Abbott has shown the politics of fear and negativity are potent, so I don't expect to see Labor support any meaningful taxation reform. Why would they when they'll be able to demonise Abbott for every cut he makes, just as he did in oppositon.

It's easy for a discussion like this to become overtly politicised.

At least you allowed the post count to get to double figures before giving in to temptation.

 

[sydboy007]

It's easy for a discussion like this to become overtly politicised.

At least you allowed the post count to get to double figures before giving in to temptation.

What tax reform did Abbott support from opposition?

Do you think I'm incorrect in saying we wont get meaningful reform without bipartisan support?

I still remember Abbotts tabling in Parliament the electrciity bill of a pensioner, claiming the carbon tax was the cause of her bill doubling from a year earlier. It turned out she'd used nearly twice as much electricity as the previous year. If that's not blatant partisan fear mongering I don't know what is. Actually I'd just call it a lie.

 

[drsmith]

Do you think I'm incorrect in saying we wont get meaningful reform without bipartisan support?

I don't remember too much bipartisan support when it came to the GST even though the Libs (unlike Labor with the carbon tax) won an election with it as part of their policy platform. The Libs had to ultimately do a deal with the Democrats which compromised its base. It was the beginning of the end for the Democrats.

Labor won't be able to discard their Green parasites so easily.

In relation to means testing government income support, I'm still interested as to what you consider to be a reasonable EMTR.

 

[sydboy007]

In relation to means testing government income support, I'm still interested as to what you consider to be a reasonable EMTR.

I don't know. It's an issue that the best minds have yet to solve.

Yet the current system is crippling us with unsupportable welfare payments.

Maybe we need members of society to accept that moving from Govt support to not needing it is a good thing, and the personal cost is part payment for the prior support received.

Do you have any suggestions on how to solve the issue? Do you see someone in the top 40% of household income needs / should receive Gov t welfare because that's what's occurring now.

I find it ridiculous that you can have retired people earning 6 figure tax free incomes and they're entitled to the highest subsidies on pharmaceuticals. Just ludicrous. Oh and it was Howard who gave us that policy.

 

[drsmith]

I don't know. It's an issue that the best minds have yet to solve.

As a more fundamental question then, what do you consider would be an appropriate tax rate for the highest EMTR and where on the income scale do you feel it should apply ?

 

[sydboy007]

As a more fundamental question then, what do you consider would be an appropriate tax rate for the highest EMTR and where on the income scale do you feel it should apply ?

I was thinking a possible way around helping to ameliorate high EMTRs could be a form of income averaging over a 24 month period.

As I've said previously target the bottom 30% of income earners with phasing out occurring by the 35% level.

To offset the high EMTR this would cause you could allow the individual to average their income over a 24 month period. That way they can gain the benefits of extra hours / income. This will at least help to overcome the disincentive of taking on casual work / limited hours of a new job where the associated costs could nearly eat up all the new income when the high EMTR is included. Generally it''s much easier to get extra hours / full time employment when you have a job.

I'll say once again that the current welfare system that provides income to support to those in the top 50% of income earners is wrong, let alone the perverse situation where you can be in the top 25% and still get government assistance. Where is the sense in that?

The problem is neither of the major parties has any interest to try and sort this issue out. They're pretending we can have it all - reduced taxes and increased spending. The falling ToT and negative real per capita GDP growth is going to destroy that myth fairly quickly.

Are you arguing for the status quo or do you believe this is an area that needs to be reformed?

The UK seems to be making quite radical changes to their welfare system.

http://webarchive.nationalarchives....ov.uk/docs/universal-credit-full-document.pdf

Still trying to get my head out income disregards, but seems in simplistic terms they will have a single payment, with a few extras to cover disabilities / children / rent.

Tapering will occur at 65%, but they will allow income disregards so that someone who say has a disability and currently cannot work many hours, could say do 5 hours of work a week and that income is disregarded ie no loss of the extra income. The disregards can also be higher depending on the number of children within the family.

Well worth a read if this is an area of interest for you.

 

[drsmith]

Are you arguing for the status quo or do you believe this is an area that needs to be reformed?

It's the income support packages themselves that need to be reformed. Means testing attempts to treat the symptom of the cost of income support to the budget with the obvious consequence of punitive EMTR's, even at modest income levels while averaging over multiple years just makes a broken system more complex.

Effective Marginal Tax Rates for a couple with children aged 13 and 15, 2012–13 from the Clean Energy (Income Tax Rates Amendments) Bill 2011 [and] Clean Energy (Tax Laws Amendments) Bill 2011.

http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1112a/12bd065

 

[sydboy007]

It's the income support packages themselves that need to be reformed. Means testing attempts to treat the symptom of the cost of income support to the budget with the obvious consequence of punitive EMTR's, even at modest income levels while averaging over multiple years just makes a broken system more complex.

Effective Marginal Tax Rates for a couple with children aged 13 and 15, 2012–13 from the Clean Energy (Income Tax Rates Amendments) Bill 2011 [and] Clean Energy (Tax Laws Amendments) Bill 2011.

http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1112a/12bd065

i think we have to break it down in that the politics of this are just plain nasty. It will be a major effort to just stop paying welfare to those on avg + incomes as we currently do.

I think that has to come first so that we continue to have the capacity to provide a welfare safety net.

Once that's achieve, then the tricky issue of high EMTRs can be tackled. I honestly don't believe they can be done at the same time, unless we moved into a double rainbow and unicorns for all kind of world where Government and opposition constructively work together.

IMHO, it'll take a recession to get a reduction in middle / upper class welfare.