Modeling by the Australian National University’s Center for Social Research & Methods suggests that relatively wealthy households will benefit the most from the federal government’s $8.5 billion cost-of-living program.
The modeling shows that the wealthiest 40% of households in terms of income will receive 45% of the cost of living relief, while the poorest 20% of households will receive only 15% of that money.
Associate Professor Ben Phillips says budget measures could have been better targeted to help those most at risk of financial stress.
From The Australian:
“What we find is that around 56% of the money goes to the top half of households according to income distribution,” [Ben Phillips] said, or about $4.8 billion of the estimated $8.5 billion…
“When the government talks about how it has targeted low and middle income Australians, it shows that the bulk of the money is going to middle and high income households”…
Giving taxpayers’ money to households that had the capacity to absorb higher fuel and grocery costs was “a bit of a waste of money,” he said…
“From a pure policy standpoint, what would have made more sense would have been a stronger package for welfare recipients and less emphasis on the LMITO boost, which was unnecessary. “
Not really a surprise. Electoral calculations indicate that there are more votes to give money to the middle and upper classes than to the poor.
Political integrity and politics rarely coincide.
Leith van Onselen is Chief Economist at MB Fund and MB Super. He is also chief economist and co-founder of MacroBusiness.
Leith previously worked at Australian Treasury, Victorian Treasury and Goldman Sachs.
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