Report plots wealth vs. welfare
Tax concessions for the wealthy cost the Commonwealth more than its four main welfare services combined, according to a new report.
Anglicare commissioned left-leaning think tank Per Capita to compare the costs of tax concessions and welfare.
The analysts used Treasury data, ABS figures and the HILDA survey, and calculated that major tax concessions total about $135 billion per year.
The four main welfare payments — the aged pension, family assistance payments, disability benefits and Newstart — were found to cost a combined $124 billion.
The tax concessions cost the budget about six times as much as Newstart.
The research also found that more than half of the benefit from tax concessions goes to the wealthiest 20 per cent of households.
The findings throw doubt on government rhetoric about the benefits of tax concessions to “average” Australians.
For example, half of the foregone revenue from negative gearing goes to the top 20 per cent, while just 6.2 per cent goes to the bottom quintile.
Similarly, more than 80 per cent of the savings from the capital gains tax concession go to the wealthiest fifth, and just 2 per cent to the bottom 20 per cent.
It also appears that the foregone revenue from discretionary trusts is entirely received by the wealthiest 20 per cent of Australians, although the report notes that it is difficult to calculate the lost tax revenue from discretionary trusts.
The full report is available in PDF form, here.