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Wednesday, September 08, 2004

Hill on the ALP Package

Elizabeth Hill has written an article on the ALP tax package.  In it there are some interesting points.  First she deals with my bugbear of income splitting:

"Unfortunately, though, Labor didn't just leave it at that. Instead it undermined the equity of its policy through the reappearance of Family Tax Benefit Part B in another guise - an increase in the tax-free threshold to $12,000 for families with at least one child under 18 years."

But then goes on to say:

"But the policy document shows that family payments do differ according to the division of paid labour between workers. However, unlike the Coalition's family tax package in which maximum financial rewards accrue to families in which paid work is divided most unevenly, Labor's policy provides the highest benefit to families in which paid work is shared evenly."

Which I'll have to check on (this will take me some time as despite what people may think, I am by no means an economist).  If true, Brandy may make it's way back to Latham, however, the income split will become an immovable plank and will only grow.

But then we have the sting in the tail:

"However, women with young children face numerous challenges and do not need government standing over them with a stick that rewards paid work over non-paid caring work. Particularly when quality and affordable child care is neither easily available nor part of Labor's package - someone has to care for the children."

For people who don't have kids, childcare (if you can get it) costs at least $50 per day or $1000ish dollars per month per child.  So for the average of about 2 children you are looking at $24,000 per year.  This is the real problem with women going back to work, it is just not viable in many cases.

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