The Federal Government’s proposed income tax cuts will favour wealthy men and leave their female counterparts in the lurch despite women being hardest hit in terms of lost employment due to the coronavirus crisis.
New modelling from The Australia Institute suggests employment during March and April fell 3.9 per cent for men and 5.3 per cent for women.
Men had their hours reduced by 7.5 per cent, while a woman’s working hours dropped by 11.5 per cent on average.
“Despite women facing a bigger impact from the COVID-19 recession, government stimulus has focused heavily on male-dominated industries such as construction,” The Australia Institute senior economist Matt Grudnoff said.
Despite COVID-related job losses affecting women more than men, bringing forward income tax cuts will benefit males more than twice as much.
For instance, if stage 2 of the tax cut is brought forward, for every $1 of tax cut that women get, men will get $2.28.
If both stage 2 and 3 of the tax cuts are brought forward, men will get $2.19 for every $1.
Mr Grudnoff said the research indicated the tax cuts would mainly benefit high income earners who were “overwhelmingly” male.
“Giving tax cuts to the wealthy will have a very limited stimulatory effect on the broader economy, but it will significantly widen the economic divide that already exists between men and women in this country,” he said.
“Rather than spending billions of dollars bringing forward tax cuts that mainly go to men on high incomes, the Government could better target that stimulus.”
He said investing in employment intensive industries like healthcare, aged care and education would be more efficient than bringing forward the tax cuts, creating more jobs for every million dollars of stimulus.
“These industries also employ large numbers of Australian women who have been disproportionately affected by the COVID-19 recession,” Mr Grudnoff said.
The Government has hinted at shifting the timing of the tax cuts in the Budget, which is due to be handed down on October 6.
Treasurer Josh Frydenberg previously argued tax cuts “put more money into people’s pockets”.
“More money into people’s pockets means more spending and more spending means more jobs,” Mr Frydenberg said earlier this month.
Stage 2, which increases the threshold of the 32.5 cent income tax bracket from $37,000 to $45,000 and the threshold of the 37 cent bracket from $90,000 to $120,000, could kick in for the 2022-2023 financial year.