You pay $100 a week to keep people on welfare

The average single worker is now paying more than $5000 a year in tax - or nearly $100 a week - to fund the nation's growing welfare budget.

And a bigger tax slice of the weekly paypacket is going towards paying the interest bill on the nation's record $143 billion net debt.

An analysis of the Federal Budget by the Tax Institute reveals that about 35c in every dollar collected by the taxman from the average worker pays for the welfare of others, up from 33.3c.

Tuesday's Budget papers show the welfare and social security budget will leap by $4.8 billion to $131.6 billion.

The big winners from this cash splash in Treasurer Wayne Swan's so-called "battlers' budget" are low- and middle-income families.

A single person on the average wage of $69,000 will get a tax cut of $373, but still pay about $14,557 in tax.

Their share of the welfare bill is up by $118 to $5093 and their contribution to the interest on the nation's debt rises by $46 to $270.

But a smaller share of their tax is going towards health, education, the states, defence and transport.

The Tax Institute analysis shows about $2360 goes to health, $1144 to education, $834 for defence, $193 for foreign aid and $46 - around 13c a day - to the ABC.

The typical worker cheering for Australia's athletes at the London Olympics has contributed about 3c a day through the taxes they pay.

The study shows that a family on $99,000 with two children (dad working full-time earning $69,000 and mum on a part-time wage of $30,000) and no child care costs, will be $679 a year better off from tax and welfare changes.

They receive $5046 in benefits such as the private health insurance rebate, family tax benefit and the schoolkids bonus - which passed through Parliament last night. But the family pays $4427 towards the welfare budget.

A family on $150,000 (dad $90,000 and mum $60,000) and using child care, will be $1331 better off than last year.

They get $12,150 in benefits and pay $7634 through their tax towards welfare.

But a family on $200,000 (mum $120,000, dad $80,000) gets $11,550 in welfare - mostly from the child care rebate - but pays $14,466 through their tax for welfare. Overall, their gain from the Budget is just $6 a year.

Senior tax counsel at the Tax Institute Robert Jeremenko last night said the analysis showed the complexity of the tax system and the "welfare-tax churn".

"One person's tax is another person's handout," Mr Jeremenko said.


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