Australia’s Soaring Tax Revenues Due To Booming Economy, Argues PM

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

20 September 2004

A larger than expected tax take is evidence that the Australian economy is booming, Prime Minister John Howard declared last week.

In a press conference last Friday, Treasurer Peter Costello revealed that GST revenues have come in A$3 billion higher than predicted in this year’s budget.

According to Costello, the states and territories of Australia will get a cumulative windfall of A$11.8 billion over and above their guaranteed amounts, forecast in March 2000.

Mr Howard observed: "One of the reasons why the federal government's budget position is so much stronger is because we've collected a lot more company tax. It means that more people are in work, companies are making higher profits.”

However, opposition parties have interpreted the figures in an entirely different way. Labor Party leader Mark Latham claimed the bigger GST payments to the states confirm the Liberal-National coalition is the nation's highest taxing government on record.

"If all that money is being raised out of Australian taxpayers' pockets, surely it makes the federal argument to provide relief," Mr Latham observed, repeating his criticism of the government’s decision not to provide workers earning less than A$52,000 with significant tax relief in the 2004/2005 budget.

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