The Letter

Not that I get "the Letter" from Richard Prebble, let alone quote from it but I liked this post budget comment.

The effective tax rate on a low income family is 88c on every new dollar they earn. A family with two children qualifying for all the allowances would have to earn $21,000 a year extra to increase their net income by the $2,500 they would immediately receive on having another child! The incentive in the budget is for households with dependent children to reduce their income, refuse promotion or overtime and to work fewer hours.

This always happens with means - tested allowances. Anyone remember back to 1946, when a stay-at home woman with six kids was getting the equivalent of the minimum wage, no matter what her husband was earnin g? These days her partner would have to earn less than $20,000 to get that much benefit.

The rest of Prebbles letter is here