High-income households will receive up to 10 times more under the Morrison government's accelerated tax cuts than low-income households, with experts saying the package should have undergone fundamental changes.
New analysis from the National Centre for Social and Economic Modelling (NATSEM) at the University of Canberra shows the 2020 Budget heavily favoured higher earners, by using tax cuts, wage subsidies and asset write-offs as the path back to prosperity.
Under the tax package passed on Friday, a couple on high incomes with no children would be around $5000 a year better off. In comparison, a household with one person unemployed and another on the minimum wage with no children would be $500 better off.
High-income earners will also have an extra $2430 in disposable income under the changes - four times the income gained for people on the minimum wage.
"The message from our analysis is clear. The less households earn, the less they gain from this budget," the centre said.
NATSEM's Professor Robert Tanton said it made sense that higher earners would gain the most from a budget centred on slashing taxes.
But Professor Tanton said the cuts were skewed too heavily towards those who were less likely to spend the extra money.
Research from the Reserve Bank of Australia using Australia's HILDA dataset shows lower income households tend to spend a greater share of extra income. Research from the National Bureau of Economic Research has also shown internationally, low-income families spend more of any income increase.
Instead, the tax cuts should have been adjusted slightly so more money could have gone into the JobSeeker unemployment payments, Professor Tanton argued.
"I'm not against tax cuts at all, they are a valid fiscal stimulus measure, but the way that they used the tax cuts from last year, there could have been that adjustment slightly to those tax cuts to say there's a bit of extra money now and we'll put that into a package that's going to help those people who are still unemployed," Professor Tanton said.
"What we've seen this year is huge unemployment levels and so unemployed people aren't going to benefit at all from tax cuts, and so using the tax cuts that the government developed last year and just bringing them forward, our thinking is there's a whole lot of things that could have been done with those tax cuts - adjusting them so there'll be a bit more money to put into things like JobSeeker which then people who are unemployed do benefit from."
Prime Minister Scott Morrison said on Friday 11 million Australians would be better off under the changes.
He said the budget also guaranteed essential services, to ensure the social safety net was strong.
"More money for hospitals, more money for schools, more money for disability, more money for aged care," Mr Morrison said.
But the budget also heavily relied on businesses being confident enough to invest, which Professor Tanton also said was a gamble.
"They're relying on the fact businesses are going to use the extended depreciation, the tax breaks there to buy infrastructure, they're relying on businesses employing people under 35 to take advantage of those tax breaks there," Professor Tanton said.
"If that does work, that will lead to stimulus in the economy but it is sort of a big assumption there that business will take that on board and will start using some of those measures.
"Business has been through a particularly difficult period so business confidence is going to be fairly low and so it's difficult to see how that is going to come up."
NATSEM provides a yearly snapshot of how the budget affects Australian households.
Their outlook was more "conservative" this year, as the coronavirus pandemic made their usual datasets change more rapidly.