October 15, 2007
The Federal Government has offered $34 billion in tax cuts as part of a five-year plan, throwing down the gauntlet on tax policy on day one of the election campaign.Howard and Costello chose the first day of the election campaign to release early the mid-year budget review and said the money to cover the cuts would come from significantly improved growth forecasts and employment growth.
A fist-full of tax dollars is an opening shot in the election and a significant shift in their 'go for growth' brand that has previously relied on porkbarrelling in Tasmania and elsewhere. Politically, it has got the jump on Labor in a big way. as Rudd hasn’t released a tax policy yet. Howard and Costello must be desperate to get some traction going by attempting to shift and reframe the media narrative forms (annihilation) at the start of the campaign.
Costello released the mid-year budget review today, upgrading growth forecasts and employment growth from previous forecasts, that will generate revenue which will pay for the tax cuts....The 30 per cent threshold will increase from $30,001 to $34,001; and the 40 per cent threshold will increase to $80,001 and the 45 per cent threshold will increase to $180,001, as announced in the 2007-08 Budget.
From 1 July 2009 the effective tax free threshold for low income earners rises to 15,000 and the 30 per cent threshold to $35,001. From 1 July 2010 the 30 per cent threshold will increase to $37,001.
One good aspect is that it encourages the welfare to work shift by reducing their effective tax-free threshold and particularly by lifting the threshold up until which you pay 15 cents in the dollar, is boosting the number of people joining Australia's workforce.
On the other hand, 4.25% growth represents an economy pushing the limits of its capacity. So pouring tax cuts into such an economy must risk the chance of overheating. And overheating means inflation, and inflation means rising interest rates.that's how the Reserve Bank of Australia would see it.
Why not better services or infrastructure to lower taxes? Where's competition reform in energy and water? Or human capital improvements?
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Gary,
didn't Captain Smirk accuse Howard of buying off the electorate, a while back? So why is he there with Howard doing exactly that? What's happened to his principles? You know the ones about the need to keep a lid on spending and stopping the pork barrel.