Government to act on SACS salary sacrifice problem

At a joint press conference in Canberra yesterday Treasurer Wayne Swan and Minister for Families, Housing, Community Services and Indigenous Affairs Jenny Macklin said they will act to fix proposed changes to the way income is calculated for the purpose of determining Family Assistance payments for social and community services (SACS) workers who have been utilising salary packaging because of the PBI status of their employer.

The Ministers say they are committed to addressing this issue as quickly as possible.

The changes, which were introduced by the Howard Government in the 2006-07 budget, are due to start from 1 July 2008. You can download the full transcript of the press conference here: Download the transcript of the Swan-Macklin press conference 18/06/08(DOC)

What could the Government do?
One of the options for the Government is to put a Bill urgently before Parliament in the next seven days to change the law so that employees of Public Benevolent Institution (PBI) status employers are not affected from 1 July 2008.

The Rudd Government does not control the Senate so it will need the agreement of the Liberal and National parties for any changes. The opposition parties have been silent on this issue so far. Given that they introduced the laws in the first place, we hope they do not block any measure that is proposed.

We will need to be ready to swing into action if the opposition parties decide to support the original laws.

What can you do?
Make sure you check the ASU website regularly for updates and if you have not sent an email to the Federal Ministers to let them know what you think please do so now. The ASU has organised a template email that you can use to express your concerns. Many people have amended the email to let the Ministers know exactly how they will be financially affected. You can access the email template here:

Click here to send an email to the Ministers

Media focus on our sector increases
This issue has received extensive media coverage during the last week, including some real life ASU member examples on the front page of today's edition of The Australian newspaper and in the letters pages of the Sydney Morning Herald.

Below is a selection of what the papers are saying:

Changes sacrifice a salary - Stephen Lunn, The Australian, June 19, 2008
Vow to save charity sector from 'savage' tax moves - Misha Schubert, The Age, June 19, 2008
Thanks - tax changes will leave us worse off - Letters, Sydney Morning Herald, June 19, 2008 (third headline from the top)
Family tax benefit payments to hit pay of over 200,000 - Sue Dunlevy, Daily Telegraph, June 18, 2008
Low-paid workers to suffer - Nassim Khadem, The Age, June 18, 2008
Low-paid workers hit by tax changes - Stephanie Peatling, SMH, June 18, 2008
Tax change to hit charity staff- Ewin Hannan, The Australian, June 18, 2008
Fringe benefits changes to hit low paid workers - ABC Online, Posted Jun 17, 2008, Updated Jun 17, 2008 10:59am AEST
Union seeks fringe benefit tax changes - The Age, June 17, 2008