Australian MP Proposes Income Tax Splitting For Families

by Mary Swire, Tax-News.com, Hong Kong

27 June 2003

Under a new proposal by an Australian Federal Government MP, families would have the ability to split their annual income tax between spouses, potentially leaving many taxpayers thousands of dollars better off.

In an article written for the Herald Sun, Liberal member for the north eastern Victorian seat of Indi, Sophie Panopolous claims that a single income family earning $40,000 per year could be $70 a week better off if the main earner's salary was split evenly between husband and wife for tax assessment purposes. This would mean a family bringing in $70,000 per year would be $125 better off, according to Panopolous.

Although income splitting is by no means a new idea in Australia, (It was a policy supported by John Howard when in opposition in the 1980's), Ms Panopolous complains that it has been shoved onto the political back-burner for the last decade, and argues that it is a viable pro-family alternative to paid maternity leave.

"Unlike paid maternity leave, the benefit of income splitting to the recipients would not be limited to a few months," Panopolous wrote, at the same time stressing the need for a more radical overhaul of the taxation system to cater for an ageing population and declining birth rate.

Recommended