Australian Labor Party Pledges To Cut Income Taxes

by Mary Swire, Tax-News.com, Hong Kong

05 November 2002

Speaking on Monday, Opposition Treasury spokesman, Bob McMullan pledged that Australia's Labor Party will reduce income taxes, probably by tackling 'bracket creep', if returned to power at the next election.

Following a newspaper report which revealed that between 1996 (when the Howard government came to power) and 2000, the amount of income tax paid by Australians as a proportion of GDP rose from 16.4% to 17.9%, Mr McMullan told listeners to the John Laws radio programme that this increase represented around $1,000 in extra taxes per household, and observed:

'That really explains why people think 'Well, the economy seems to be going well, but my budget is taking a bit of a hit.' It's because $1,000 of it extra is going to Peter Costello.'

Meanwhile, former Treasury official, and Access Economics director, Geoff Carmody announced yesterday that wage earners will always shoulder a proportionally higher share of the country's tax burden, as GST revenue will never keep up with government spending.

'It [GST revenue] will decline because important elements of consumption - health and education in particular - are not subject to GST and they're rising proportions of consumption, particularly health,' he explained.

However, speaking to the AAP news agency on Monday, a spokesman for Assistant Treasurer, Helen Coonan declined to match Labor's 'bracket creep' pledge, arguing that:

'This government had handed back four times the bracket creep in the lead-up to the last tax cut (in July 2000).' He continued: 'I wouldn't speculate on the future but unlike Labor, when this government promises a tax cut, it delivers it.'

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