“Labor’s radical plan for tax rates” screams the front page of The Oz. Trouble is, Labor apparently does not yet know if it wants to drop the top (45 cents in the dollar) rate or the bottom (15 cents in the dollar) rate. The right answer is “both of them” but that would cost more than even Australia can afford just now.
It’s that time of the year when The Oz gets together with the Melbourne Institute to make whoopee about economic policy, and tax reform has been a constant theme.
George Megalogenis reports:
Labor’s policy goal may increase the temptation for the Government to move first by reforming the personal tax scales ahead of the federal election, due next year. It would cost less than $2 billion a year to scrap the top rate of 45%, based on Labor’s research. However, sources say this is an option more likely to appeal to the Government than the Opposition.
Less than 2% of taxpayers are on the top rate, which applies on every dollar earned above $150,000 a year.
Abolishing the 15% rate – which mainly covers part-time working mothers on $6001-$25,000 a year – would be significantly more expensive for Labor. But it could be achieved over a number of years, and be sold as a reform to increase incentives for people to move from welfare to work.
The editorial exhorts us to “entrench our prosperity.” The resource boom will inevitably end but “The Lucky Country is once again in an enviable position, but decisions must be taken now to ensure the opportunity is not squandered and that the benefits last long after the boom has reached its inevitable end”.
The Australian/Melbourne Institute conference is on November 2 and 3. It will warm the cockles of your heart, so is not to be missed.
Henry’s editor reported on the 2002 conference thus: “In many respects Australia is performing brilliantly – with high productivity growth, low inflation and strong overall growth in living standards. Yet at the Conference there was strong, indeed passionate, focus on identified shortcomings. Unemployment far too high, too much entrenched poverty, insufficient opportunity for disadvantaged kids, inadequate access to health and educational opportunity for too many people, deep questions about environmental sustainability – these are the burning issues in contemporary Australia.”
We await the full program in the hope it is just as wide as this agenda.
Read more at Henry Thornton.