Emergency Tax Cuts A Possibility In Australia

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

21 January 2009

Australia's Treasurer Wayne Swan has hinted that the federal government may introduce emergency tax cuts over the coming months in order to try to steer the economy away from a possible recession.

Mr Swan made his prediction that emergency tax cuts could become a necessity in light of a speech delivered by the Prime Minister, Kevin Rudd, in Sydney on January 19.

According to the Prime Minster, Australia is currently threatened by the possibility of a deficit as lower-than-average tax revenues are preventing budgetary targets from being met.

Mr Rudd has indicated that the government could be preparing to begin work on a second tax cut package, after conceding that the AUD10.4bn program introduced last year may not be enough to sustain the economy through a recession.

In response to this, Mr Swan commented that a stimulus package could pave the way for further tax cuts, explaining that Australia was better placed "to respond with further packages, whether it would be packages which would stimulate consumption through changes in tax, for example, or whether it was via a combination of investment in infrastructure and other measures."

Mr Swan has, however, not clarified whether he would push for cuts to personal or businesses taxes, or fast-track the implementation of the income tax reductions which are due to come into effect in July should the stimulus package proposal become reality.

Recommended