Does Australia’s tax system treat male and female-dominated industries differently?
As we approach the end of the financial year, the ABC has taken a look at individual tax deductions, offsets and income brackets to see whether questions of gender bias go beyond the now-defunct “tampon tax”.
Advocates say structural inequalities can put women at a distinct disadvantage while other specific deductions, offsets and tax items might inadvertently be affecting women.
It comes as national discussion turns to whether the Parliament will pass the Federal Government’s third round of tax changes, which will see reductions in the higher tax brackets that some say adversely affect women more than men.
Let’s start at the lower tax brackets
In this debate, the main thing to understand is Australia taxes people at an increasing rate depending on their income across five tax brackets.
Some experts argue the third tranche of the Government’s tax plan, which includes reducing the tax rate in the second highest bracket from 37 per cent to 30 per cent, disadvantages women.
This is because women are more likely to be part-time workers who earn less, meaning they are over-represented in the lower brackets. Ultimately, that means more men benefit from the policy than women.
Centre for Independent Studies senior research fellow Robert Carling said the argument was flawed and the tax system was blind to gender.
“It might have different effects on the males versus females, but that’s incidental to its main purpose,” he said.
“It’s not that it disadvantages anyone, it’s just that the benefits would be greater to some than for others.”
By contrast, Professor Helen Hodgson, who worked on the Women’s Electoral Lobby tax policy, said it was a “design issue” and if the tax rates were reduced in the lower brackets, both sexes would benefit equally as the reductions flowed upward through the brackets.
Income tax brackets 2018-19
- 0 – $18,200: $0
- $18,201 – $37,000: 19c for each $1 over $18,201
- $37,001 – $90,000: $3,572 plus 32.5c for each $1 over $37,000
- $90,001 – $180,000: $20,797 plus 37c for each $1 over $90,000
- $180,001+: $54,097 plus 45c for each $1 over $180,000
“If we have the system that flattens taxes at the bottom end, then women will benefit and so will men who are often in the high-income levels,” she said.
Professor Hodgson, who is a taxation law expert at Curtin University, said she was particularly concerned by women whose incomes fell in the bottom tax bracket, earning less than $18,000 a year, because they paid no tax.
While this is largely a good thing, an unintended consequence was that they could not take advantage of any of the benefits made available through deductions or offsets.
“Unless you can get these benefits into their hands in other ways through the welfare system, then they don’t get any benefit out of changes,” Professor Hodgson said.
Tax offsets can affect women more
Tax brackets aside, it’s offsets that can directly affect women.
Did you know?
- 85 per cent of female taxpayers earn less than $90,000 compared to 72 per cent of male taxpayers
- The median taxable income in 2016-17 is $37,908 for women and $52,376 for men
- The median superannuation of a woman aged 45 to 49 is $65,796 compared to $99,305 for a man
An offset is essentially a total cash discount on the amount of tax you have to pay, as opposed to a deduction on taxable income.
For example, there’s a superannuation “spouse tax offset” that was extended in 2016 to help boost low super among women.
The policy allows for a higher earning partner in a relationship, often a male, to make voluntary contributions to his partner’s super if they earn less than $40,000 — usually a woman.
The policy relies on gendered assumptions including that it is men who often earn more than women.
And while it’s often true, it’s not true in every relationship and not in same-sex relationships.
It also assumes that most women are married, particularly older women nearing retirement.
But in Australia, one in four households are single-person households — that’s 2.3 million people — and the number is rising.
And of the remaining 6.7 million households, 949,000, are single-parent families.
Professor Hodgson said while there was a clear gender element to the policy design, it applied equally to the sexes.
“You can also make your own contributions and actually get a more generous allowance for that,” she said.
Mr Carling said he supported the policy, but it was important to note that it was “very narrowly defined”.
“The spouse’s income has to be very low to qualify for the contribution and it’s a maximum of [about] $540 a year. It’s a pretty small thing,” he said.
Mr Carling noted the design of the superannuation and social welfare system was such that women who might not qualify for this particular offset were otherwise likely to qualify for things like the age pension.
‘Till private health do us part
Similarly, many women can expect to be the losers when it comes to the private health insurance rebate or medicare levy surcharge because both are calculated using a couple’s joint income.
So if a husband earns a lot more than his wife, a common outcome, their incomes are added together to calculate costs which could push her into a higher bracket when it comes to these two items.
For example, if a husband earns $120,000 and his wife $61,000 a year and they don’t have private health insurance, then they both get slugged the surcharge because they cross the $180,000 threshold.
If the woman remained single, she would fall under the threshold for singles.
Professor Hodgson said in the past in countries like the United Kingdom, there had been controversy over the issue of joint means-testing because of concerns it was a return to an outdated joint income tax system.
Mr Carling, who doesn’t generally support gendered views of taxation, said the joint means-test for private health insurance rebate and medicare levy surcharge was “an interesting case” because Australia’s tax system was largely based on individual assessments.
“So there is an inconsistency there and yes it does disadvantage one member of the household who might be a low-income earner,” he said.
“It is a bit of an anomaly that justifies closer investigation.”
Are some deductions gendered?
Under the Australian Taxation Office’s list of “occupation-specific” tax deductions, there is an entire category for professional footballers, including AFL, rugby league, union and soccer players.
Athletes from the male-dominated sports have been given a generous list of items they can claim including gym fees, transporting sports equipment, travel upgrades, sports skins and even on-field fines as deductions.
Professor Hodgson said typically male industries had more success when lobbying for specific rulings and deductions.
“These deduction guidelines have been around for decades in some industries and it’s only recently [that] we’ve seen the number of female athletes reaching the same level of professionalism,” she said.
“A female netballer who has the same types of expenses as a footballer would be able to claim the same sorts of deductions.”
Stephanie Caredes is from the Tax Institute’s Women in Tax program said historically male-dominated industries and unions might have been more likely to go to court to get specific rulings.
“It may appear that there’s a gender bias with certain guidance or rule, but those rules apply to whomever has a job in that occupation,” she said.
“I don’t necessarily believe that any gender bias would be intended, that’s not to say it doesn’t exist.”
|Gender||Number of uniform, clothing expense claims||Value of uniform, clothing expense claims|
What about flight attendants?
When it comes to looking good, there’s a specific tax ruling that actually prevents flight attendants from claiming make-up, even though their grooming is sometimes checked as part of their role.
The only exceptions are hydrating moisturisers and conditioners, which can be claimed, because pressurised plane cabins dry out hair and skin.
Industry insiders told the ABC although most Australian airlines did not specifically require its female employees to wear cosmetics, make-up lessons were part of their training.
However, some suggested Australian cabin crew working on international airlines might encounter this requirement.
There’s a specific tax ruling that actually prevents flight attendants from claiming make-up.
While sport “skins” are okay for the footballers, those who must wear black clothing in female-dominated industries like hairdressing, retail and hospitality are not eligible to claim the items, even though the work itself may render the clothing inappropriate for outside use because of stains and wear.
Again, Professor Hodgson said the distinction made by the tax office here was not about gender but rather, grooming.
“So you’ll find for example that even though certain male-dominated professions like police and defence force personnel are required to meet certain haircut standards, the cost of those haircuts isn’t deductible because it’s considered to be a personal expense,” she said.
|Gender||Value of other work-related expenses (tools, internet, phone, union fees) 2016-17|
Tampon tax gone but other challenges remain
Professor Hodgson said while the tax laws and rulings were written in gender-neutral ways, they sometimes had “secondary effects” that could be sexist.
“If you actually go looking for gender discrimination in the tax laws, you don’t see it because it’s not written,” she said.
“What you really need to be looking for is the way in which women’s working lives are different from men’s.
“That actually results in differences in the way the laws apply to them.”
There was also an argument the GST disproportionately affected females, Professor Hodgson said.
“Woman spend more of what they do earn because they are often looking after families, so the GST will have a bigger effect on women’s wages than it will on men’s,” she said.
And, while the tampon tax has been removed, others have raised concerns that breastfeeding products like pumps, nipple shields and nursing systems still attract a 10 per cent GST even though baby formula and other medical aids are exempt.
“It’s those sorts of secondary issues that will mean often women end up paying a higher burden of tax than men do,” she said.
Again Mr Carling is not convinced, saying: “Whoever is doing the weekly shopping is doing it on behalf of the household and so you should take it as a pool item for the household.”
He was sceptical about looking at the tax system from a gender point of view overall, which he said sometimes had been taken to “ridiculous lengths”.
“These are the sorts of things that are really relevant: incentives, investment, income distribution and so on,” Mr Carling said.