Ever asked yourself what sort of non-work related payments should be
tax deductible? It’s a question that left wing Federal Labor MP Alan
Griffin turned his mind to when he launched this ferocious attack on
the Howard Government’s sweeping and controversial legislation on
electoral reform.

Griffin opened his second speech on March 29 as follows:

The Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Bill
2005 represents one of the most outrageous attacks on Australian democracy
since 1901. While we are supportive of some of the minor clauses of this bill,
its most substantial sections make it completely unacceptable.

Griffin’s main beef is with the proposed early closure of the electoral
roll and the increases in disclosure thresholds for political donations
from $1500 to $10,000. However, he also lets fly at the proposal to increase tax deductibility of political donations:

Labor believes that the proposed increase from $100 to $1,500 for individuals or
corporations and independent candidates is
a completely inappropriate way to spend taxpayers’ money. It is just another
example of the coalition government looking after themselves and their mates at the
expense of ordinary Australians. According the government’s own figures, it is
estimated that these changes will slug Australian taxpayers to the tune of $22
million over four years.

It’s a very interesting point, which goes to the question of the
government’s priorities. What other spending in Australia is tax
deductible? You get no breaks for hiring a nanny to help look after
your children. There’s no support for families who spend after-tax
dollars sending their children to private schools. Parents, primarily
dads, who get slugged huge sums in child support also get no tax breaks.

Surely parents who want to, or are compelled by law, to spend money on
the welfare, care and education of their children deserve some sort of
tax break. A maximum of $1500 a year would go a long way. So why should
the same parent get a $1500 tax deduction for giving the Liberal Party a
donation?

The same goes for negative gearing investments, primarily shares and
housing. Why is that more important than investing in education and
family?
All negative gearing achieves is the burgeoning of consumer debt and the creation of asset price bubbles in some sectors.

Conveniently, the new law will take effect in May, once it has received
Royal Assent, so all the political parties will be able to join the
traditional “write your cheque in June to get a tax break” marketing
push.

Peter Fray

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