Australian Labor Unveils Tax Cut Plans For Low And Middle Incomes

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

08 September 2004

The Australian Labor Party leader Mark Latham has announced proposals for tax cuts for lower and middle income earners as the centrepiece of the party’s economic policy as Election Day draws nearer.

Under Labor’s plans, employees earning less than A$52,000 per year will receive an A$8 per week income tax cut whilst those falling into the higher 47% income tax bracket will benefit from a proposed increase in the threshold at which the top rate becomes payable, to A$85,000 from A$80,000.

"This is the tax relief the government said couldn't be provided," remarked Latham, jibing at the ruling Liberal/National coalition’s recent tax measures.

"The great backbone of our nation, middle Australia, the taxpayers and families on A$25,000 to A$85,000 a year, they've all been saying 'Ease the squeeze, take financial pressure off Australian taxpayers, take financial pressure off Australian families'," Latham observed.

Labor’s plans will cost A$11 billion over three years with A$3.5 billion of this to take effect next year – provided the centre left party manages to oust John Howard’s administration.

The party intends to pay for the tax cuts with better tax enforcement, cuts to retirement saving incentives and a deceleration in tariff reductions in the textile and automotive industries.

Opinion polls have revealed that support is evenly split between Labor and Mr Howard’s government, raising the real possibility that October’s election could result in a hung parliament.

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