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AAP
Kat Wong and Andrew Brown

Tax change welcomed but groups rue 'missed opportunity'

People on income support are worst affected by the cost-of-living crisis, says ACOSS. (Dan Peled/AAP PHOTOS)

Welfare groups have called on the government for further tax reform measures to address inequality, after changes to stage three tax cuts were unveiled.

Under the proposed changes, which will take effect from July 1, Australians earning an average $73,000 will get a tax cut of more than $1500 a year.

However, Australians on the upper end of the income ladder will have their savings slashed with those earning $200,000 receiving $4500 in tax cuts rather than the originally proposed $9075.

Oxfam Australia director Rod Goodbun said while the changes were a welcome step forward to address cost-of-living concerns, the altered proposal was not enough to address poverty.

"This is a missed opportunity for a more comprehensive tax system reform that would provide the government with revenue to turn the tide in growing equality and poverty in Australia and beyond," he said.

"The challenge of poverty and inequality cannot be met by tax cuts alone, we need a bigger, not smaller revenue base to address these issues."

While ACOSS chief executive Cassandra Goldie congratulated Labor for making the tax cuts fairer, she said there was still a "missing piece".

"We've got people who are living in poverty on very low incomes, people on JobSeeker, which is now just $19,000 per year, who will get very little out of this particular measure," she told ABC Radio.

"People receiving income support payments are worst affected by the cost-of-living crisis."

ACTU secretary Sally McManus said women would be among the biggest beneficiaries of the tax changes, with about 90 per cent receiving more of a tax cut compared to the original proposal.

"Governments cannot sit back and ignore the cost-of-living pressures most Australians are feeling whilst delivering bonuses to people who need it the 

Meanwhile, Australian Chamber of Commerce and Industry chief executive Andrew McKellar has called the tax cut changes the "death knell of reform" that fails to encourage labour force participation.

Though treasury advice has disputed this and says it would re-energise the labour market, Mr McKellar maintained it would hurt Australian households. 

"For many people with a family of three or four people living in Sydney trying to pay a mortgage, supporting their family, $150,000 doesn't go a long way," he told ABC Radio.

"You're living pay check to pay check and now to not get the tax cut you've been promised for six years - I think that is a strike against aspiration."

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