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Four in Ten Australian Famlies Receive More in Government Handouts then Pay Tax

Something that really bothers me is how does a country so short of workers have so many people living off the tax payers who do work?:

THE number of families receiving more in handouts than they pay in income tax has jumped by 276,000 over the past four years to a record 4.113 million.

The income-tax-free club now covers 42.2 per cent of the nation’s 9.754 million families.

Yet middle earners just outside the tax-free zone are caught in a new personal tax pincer, with 134,000 breadwinners being pushed up the scales from 30c to 40c despite Labor claiming its first budget would “increase the take-home pay of all taxpayers”.

A large majority of the bracket creep victims are fathers who crossed the $80,000 personal tax threshold over the past two years, based on exclusive research by The Weekend Australian.

The sting on these men is helping to fund more generous tax cuts for mothers with part-time jobs – often within the same family.

The churn from dad to mum tarnishes the good news in the personal tax scales where 996,000 people in the bottom half of the income ladder are moving in the other direction – from 30c to 15c.

The Weekend Australian commissioned Treasury-style tables from the Melbourne Institute of Applied Economic and Social Research to help identify the tax-reform challenge for the nation. [The Australian]

So who’s fault is it that so many people are living off the tax payer?  Well there is plenty of blame to go around:

Kevin Rudd had argued in Opposition that John Howard ran a free-market “brutopia” in contrast to previous conservative leaders such as Robert Menzies and Malcolm Fraser.

“(They) all supported the welfare state as a form of social insurance and an institutional corrective against market fundamentalism,” Mr Rudd said. “John Howard, though, has always wanted to overturn the Harvester Judgment.”

But the hard numbers show the Howard government operated the largest welfare state in history, and Labor has, so far, done little to turn it back.

Looking at this I see Australia heading the same way as the US with an economic crisis because of out of control spending.  The spending hasn’t caught up to the Australian economy yet because of the mining boom that continues to sell large amounts of raw materials to China.  If China’s economic boom slows down, so will Australia which means who is going to pay the bill for the 40%+ of families living off the government?

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