When former Prime Minister John Howard introduced A New Tax System, around the introduction of a flagship goods and services tax (GST) in 2000, he declared it would enable “more choice for women”. Yet the reform, grounded in the regressive integration of the tax and transfer systems through the Family Tax Benefit, embedded structural inequalities in the system that continue to effect Australian women’s lives today.
In our paper, published recently in the Australian Journal of Political Science, we explore how Howard shaped women’s roles through this reform.
Family Tax Benefit: Howard’s tax and transfer system
The Howard government, elected in 1996 on a socially conservative platform, integrated the tax and transfer systems through the Family Tax Benefit (FTB). FTB Part A was a means tested payment for low to middle income families, while FTB Part B replaced the dependent spouse rebate for families who relied on one income. In dual income families, Part B payments were reduced when the secondary income earner exceeded $1,824.
In effect, Howard’s reform meant the family was taxed as a joint unit, leaving women to be viewed not as individuals but as primary caregivers and secondary income earners.
The gendered effects of Howard’s reforms
This Howard Government taxation reform disproportionately affected women. Economic modelling focused on effective marginal tax rates (EMTRs) showed that if a family’s assessable income exceeded the income tax-free threshold, the secondary income earner was faced with an increase to their EMTR. This meant secondary income earners (most of whom were women working part-time) were taxed 65 to 80 per cent in the dollar from their earnings; almost double the highest income bracket tax rate.
If a family’s assessable income was under the income tax-free threshold, the situation with a stay-at-home mother, the family tax benefit was not reduced. The personal income tax rate for primary income earners (most of whom were men) remained unaffected by the reforms; irrespective of whether the family exceeded the tax-free threshold or not.
Households that best fit the traditional male breadwinner model were rewarded by the government’s reforms. Women who traded their employment to be mothers and stayed at home to care for dependent children received the most support from the Howard government’s FTB system, including increased access to childcare.
Women with children who returned to work, whether single or partnered, or from “non-normative” gay and lesbian families, were penalised. Unsurprisingly, the high tax rates faced by the secondary earner created a disincentive for women to work.
Despite these gendered effects, there has not been any structural changes to the FTB system, or reduction in tax penalties for the secondary income earner, since this time.
Howard’s shaping of women’s roles
We analysed Howard’s speeches prior to enacting A New Tax System using a methodology based on Foucault’s theory of discursive formation. We found Howard actively constructed women’s social and economic roles, predominantly defining women as mothers and caregivers, with paid employment framed as optional or secondary to their role within the family.
This framing reduced women to economic dependents, reinforcing the idea that their primary contribution to society was in unpaid domestic labour.
Howard’s gendered framing
Howard spoke almost exclusively about women, not men, leaving the workforce to care for children. This insertion of gender into the tax and transfer system was unusual – earlier Labour reforms, such as the removal of traditional values inherent in family policy from the Income Tax Assessment Act had been directed at trying to reinvent family and caregiving responsibilities to suit both working parents.
Howard’s gendered framing was deeply embedded in Coalition values, which positioned the nuclear family as the ideal solution to poverty and welfare dependency. According to this view, self-reliance and mutual obligation meant that families—not the state—were responsible for care and economic support. For women, this often translated to staying home to care for children, whether or not this was their choice.
This has not changed. The failure of subsequent Coalition and Labor governments to reform inequities in the FTB and tax system means that Howard’s values and gendered framing remain in the system.
Impact on single mothers
The impact was even harsher for single mothers. Framed by the conservative right as engaging in “reckless fertility”, unpartnered women with children were cast as welfare dependents, targeted by policies designed to reduce welfare “dependency”. These women faced a double burden: they were expected to work under mutual obligation policies, while also being sole carers for their children.
Without affordable childcare or adequate support, these policies pushed many single mothers into long-term poverty, exposing them to high EMTRs, insecure housing, and chronic unemployment.
Concluding remarks
In 1975, the Asprey Report had already warned that the meshing of the tax and transfer system would reflect social values—not sound economic policy. Asprey was clear that any move to reduce women’s independent tax status would be a ‘retrograde step’, reflecting outdated social attitudes about gender roles rather than economic necessity (p. 206).
By recognising one-income families in the tax system, a group Howard championed as ‘disadvantaged’ and operating within disabilities, Howard weakened the tax system’s fairness and neutrality. More than a quarter of a century later, this reform continues to disadvantage women and act as a disincentive to work and financial independence.
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