Transcript - Interview Frank Quinlan on ABC Radio National AM - Tax Changes and Charities

CHARITY WORKERS COP PAY CUTS

PETER CAVE: The Federal Government has been warned its planned crackdown on fringe benefits lurks for high income earners will hit the lowly paid as well.

AM has been told senior ministers are being bombarded with emails from charity workers who stand to lose up to $50 a week in family and child care payments because of a tax measure redefining what constitutes income.

Amid claims some 200,000 low-income families will be left worse off, the Government is now trying to stem the damage, promising to look into the effect on the working families it's pledged to support.

From Canberra, Alexandra Kirk reports.
ALEXANDRA KIRK: From the Prime Minister down, the Government has made much of its focus on helping working families.

KEVIN RUDD: The family budget at the end of the day is aided by tax measures, child care tax rebate measures and the rest. A typical young family as a consequence of the Budget we've introduced of a couple of kids, $52 a week better off.

ALEXANDRA KIRK: But charities, benevolent institutions, domestic violence services, non-profit hospitals and ambulance services are up in arms over a tax measure that will hit working families hard, and in some cases, wipe out the tax cut altogether.

Frank Quinlan, the chief executive of Catholic Social Services, says the new treatment of fringe benefits tax could have a very nasty effect.

FRANK QUINLAN: In some cases for workers earning about the $40,000 a year mark, they might well be $50 a week worse off, which is a very substantial impact on people who are often doing some of the hardest work in the charities and community sector.
ALEXANDRA KIRK: The sector uses salary packaging to make up for poor pay rates. Now the Government's changing the way it calculates income for family benefits.

So a charity worker who's paid $36,000, including salary packaging of $16,000, will be treated as though they earn $50,000. That means a cut to family and child care payments.

LINDA WHITE: The negative affects to be that people will vote with their feet and march out of these services. Not for reasons that they don't want to work there but because economically they cannot afford to feed their families anymore.

ALEXANDRA KIRK: Linda White from the Australian Services Union says it's the result of a policy from the previous government, but one which Labor supported and comes into effect in a fortnight.

The union's waging a campaign, clogging the in-boxes of three Cabinet Ministers with hundreds of emails.

LINDA WHITE: We're hoping that they can hear what we're saying because it's going to affect people from the 1 July and it's going to see people leave their jobs that they love.

ALEXANDRA KIRK: More than half a million people work in the community welfare sector. The union says all those with children, as many as 200,000 workers, will be affected.

One source has told AM the "classic working family will get it in the neck".

PETER CAVE: Alexandra Kirk reporting.