Costello Drops Further Hints On Tax Cuts

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

27 February 2004

Australia’s Finance Minister Paul Costello, continues to hint that tax cuts may be contained in the governing coalition’s 2004/2005 budget due to be delivered on May 11.

"After you've paid for defense...law and order, health, aged pension, pharmaceuticals, if you can balance your budget and reduce your taxes you should," Costello told a Sydney radio station, repeating a familiar line of argument when confronted with the tax cut issue.

However, in comments made yesterday, Prime Minister John Howard signalled a somewhat more cautious approach to taxation issues, stressing that a balanced budget was of greater importance.

"Our capacity is sadly nowhere near as great as some people imagine because we will not be going into deficit, we're not going to make the American mistake of going into deficit," Howard remarked.

Meanwhile, reports earlier in the week indicated that the opposition Labor Party has launched a consultation into the feasibility of an A$10 billion overhaul of the taxation system. The centre-left party is said to be examining income tax cuts for lower and middle income taxpayers, and aligning the top two income tax brackets with the 30% corporate tax rate.

Recommended