Opposition concerned with tax change

The opposition parties have echoed providers’ criticisms of the payroll tax supplement change, but the minister tells AAA the matter is now up to the states to decide.


Shane Neumann
Shayne Neumann

Labor and the Greens say they are working closely with aged care providers affected by the Federal Government’s decision to cease the payroll tax supplement, a measure worth $652 million over four years.

However, it is currently unclear whether that support will extend to attempts to block the measure in Parliament.

Shayne Neumann, Shadow Minister for Ageing, told Australian Ageing Agenda that Labor “joined with the sector in expressing disappointment at the disregard given to aged care in the Budget and the lack of prior consultation with the sector.”

He said the government’s decision was effectively “a cut in funding to a large part of the aged care sector” and that affected providers would need to recoup it by increasing accommodation charges.

Rachel Siewert
Rachel Siewert

Similarly, Greens spokesperson on ageing Senator Rachel Siewert told AAA that her party was concerned that the changes come at a time when the new aged care system was being bedded down. “Additional changes now would further complicate the process and could have significant impacts on providers,” she said.

Senator Siewert said the “disappointing lack of consultation” from government “sets a very poor precedent and raises concern that the sector is not being included in potentially significant decisions.”

“The Greens will be closely examining this budget measure during Senate Estimates and will continue to have an ongoing dialogue with providers,” she said.

Call for support

Mr Neumann and Senator Siewert were responding to a statement from Leading Age Services Australia (LASA) on Monday that called on Labor and Greens to “negotiate with government to prevent older Australians being forced into the public hospital system.”

LASA argued that “a perceived budget saving can become a considerably larger cost” and the government’s decision would “propel potentially thousands of older Australians into the public hospital system.”

A funding reduction of this magnitude to a highly government controlled industry could only be met with the loss of staff and skills, it added.

As AAA has reported, the government announced the decision to cease the payroll tax supplement in the Federal Budget, following a recommendation by the Commission of Audit earlier this month.

In the wake of the Budget, LASA criticised the government for implementing the recommendation without consultation with the sector and since then it has been canvassing government, and now the opposition parties, on the issue.

Up to the states: Fifield

However, despite the backlash, the government appears unlikely to reverse its decision. Speaking to AAA, Assistant Minister for Social Services Mitch Fifield said the government considered the payroll tax supplement to be, in effect, an indirect transfer from the Commonwealth to the states.

“The states run payroll tax, the states determine what the conditions of the tax are, what exemptions there are, who the payroll tax is levied on… So our view is if the states want to give an exemption to those providers, then that’s something that the states need to look at,” Senator Fifield said.


Tags: greens, labor, rachel-siewert, senator mitch fifield, shayne-neumann,

1 thought on “Opposition concerned with tax change

  1. As an NPO Aged Care provider of Retirement living through to end of life care, one of Mayflower’s significant cost is the cost to provide catering services and 24 hour around the clock care. One of the reasons for outsourcing these catering services was the reduced overall costs including the payroll tax supplement.

    The Federal Government announcement to abolish the payroll tax supplements as of 1 January 2015, will significantly impact our costs to provide our service with an estimated 1.7% reduction in our budget.

    The government needs to consider the impact on not-for-profit service providers, and users ability to pay, otherwise there will be more problems down the track.

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