Australia's Accountants Call For Tax Cuts From Howard Government

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

28 April 2003

The accounting industry is the latest group to urge the Australian government to ease taxes in its forthcoming budget, arguing that the recent introduction of a General Sales Tax has hit low and middle income earners especially hard, as rising incomes have pushed more taxpayers into the top tiers of the income tax scale.

Head of the country's Association of Chartered Certified Accountants, Richard Francis, told the Melbourne Herald last week that Australia's 48.5% top rate of tax is relatively high compared with other nations and observed that the level at which it applies is too low at $60,000 (US$37,000). With the average wage set to increase from $46,000 to $50,000 this year, Francis warned that this would push more taxpayers into the second highest income tax band.

"This is ludicrous and has the potential to reduce economic activity as more money ends up in the hands of the Government rather than in the economy," the Association chief told the Herald.

Alhough the budget is expected to be in surplus this year, Prime Minister John Howard has remained cautious on the subject of taxes, citing extra burdens on the public purse brought about by the war in Iraq and the Bali bombing.

Recommended