Ah, so that’s it. Our tax system is fine. It’s welfare that’s to blame.

I caught about 30 seconds of a smirking Treasurer holding the Hendy/Warburton report on tax reform on Lateline last night, but that was about it. The report’s already buried.

Earlier in the day Peter Costello suggested that business tax cuts were a good idea, but ruled out using next month’s Budget to give relief to low-income earners from high effective marginal tax rates. Why?

Well,
our tax system is just hunky dory according to Cossie. It’s welfare
that’s the problem. “Australia’s tax rates for lower income earners are
low,” he said. “We also have quite a targeted welfare system and it’s
people adding the two together saying, ‘Oh well, these are very high,
effective marginal tax rates’.”

Tax and welfare two separate
issues? Strictly speaking Cossie’s correct, but they’re both part of
incomes policy. Perhaps the Treasurer would claim that’s Kevin Andrews’
area.

The Treasurer also indicated the report was unlikely to be
made public until later. Perhaps we might be able to get it under FOI
in 30 years time. It might give us a laugh when we go through the
papers and remember Peter Costello considered himself prime ministerial
material.

Peter Fray

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