Shifting the burden to the poor with Cradle Mountain shuttle bus fee

Whatever we call them, fees, levies, charges, tolls, rates etc they are all designed to raise government revenue, ostensibly to then provide public services.

From 15 November 2023, the Parks and Wildlife Service introduced a $15 cost recovery charge for the daily shuttle service or $45 for an annual pass.

Whilst there was outrage from the tourist industry about the tax generally there was silence about the regressive nature of the tax. A regressive tax is where the poorer you are the more tax you pay as a proportion of your income. Conversely the richer you are the less impact the tax has.

A progressive tax is one which is linked to income where the higher your income the more tax you pay. The most obvious example in Australia is the income tax system where the more you earn the more tax you (should) pay.

Let's say you are a job seeker with a dependent child on a base rate of around $400 a week. The $45 annual shuttle bus pass would be just over 10% of a week's income. Equivalent to at least three or four meals.

But, on an income of say $1200 a week the annual $45 pass would only be about 3% of your weekly income.

Whilst passengers under the age of 18 will travel for free according to the National Parks and Wildlife Service website there is no mention of low-income earners travelling for free and no mention of any concessions that might apply.

Each and every time there is a new regressive tax introduced more low-income Tasmanians become further excluded from goods and services most of us take for granted. Over time the cumulative impact on income tips more people into poverty and increases the demand on the stretched community sector providers.

Whenever new taxes are levied - for example when Parks fees were first introduced, even with concessions low-income families still pay proportionately more of their income so they are effectively still regressive.

And increasing costs of living such as food costs also add a disproportionate burden on low-income earners as indexation of pensions, benefits and allowances continues to fall behind cost increases.

And each time power prices increase low-income Tasmanians pay proportionately more of their income to meet the bills because concessions never cover the actual costs of the increases.

State Governments often find progressive taxes too hard; they can be complex and costly to manage ( who should be eligible and why - for example all seniors?) and anyway isn't the Commonwealth income support system meant to cover such costs, it's not the State Governments responsibility?

So, state governments are adept at not raising the issue hoping it will slide under the carpet. Not their worry. But it all adds up over time, a parking fee increase over here another school fee over there.

Numerous state taxes are regressive such as the so called 'sin' taxes on gambling, alcohol and smoking which disproportionately impact the poor.

However, there are very few signs from state governments over the past 20 years that they seriously want to reform taxes.

The increasing costs of living combined with gradual increases in regressive taxes is creating the perfect storm for an unhappy Christmas for many Tasmanians.

And it's not just those Tasmanians in receipt of pensions, benefits and allowances that are being impacted it includes around 25 per cent of low-income working Tasmanians.

Neither pensions and benefits nor wages are keeping up with inflation effectively cutting income in real terms. High inflation for example has meant that Tasmanian workers incomes effectively fell by $3,600 a year between 2020 and 2022.

All state governments are limited by the constitution and decisions of the High Court as to what they can and can't do in relation to taxation. But there are no restrictions on ensuring the ever-increasing plethora of taxes to raise government revenue are progressive rather than regressive.

A policy of making all taxes progressive and ensuring related concessions and benefits cover the proportionate cost increases is within the power of the State Government.

Again, on its own the shuttle fee increase seems trivial but like all the other taxes for poor Tasmanians its equivalent to a few more missed meals and less trips to the doctor or dentist.

Its good to know that the tax income from the shuttle bus will be reinvested directly into maintaining critical infrastructure and protecting Tasmania's natural and cultural values - increasingly only for the wealthy.

Professor David Adams, University of Tasmania.