Howard Promises Income Tax Cuts If Re-Elected

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

30 July 2001

Although the Australian general election is not expected until November or December of this year, it seems that both parties have already donned their campaigning hats, and the Australian public is fast reaching saturation point as the thrust and parry over taxation between the coalition government and the opposition Labor party continues.

Talking on Melbourne radio last week, Prime Minister John Howard responded to the accusations of Shadow Treasurer Simon Crean, by stating that if re-elected, his party would use any large budget surpluses to reduce income tax. 'If there are further surpluses available to return to the Australian public we are going to return them via cuts in income tax,' he explained. 'We're not going to return them overwhelmingly via higher expenditure.' He added that this promise would form part of a speech to be delivered this week, outlining his third term agenda.

Mr Crean, and Opposition leader Kim Beazley have both claimed in the past that in order to reduce income taxes, the Conservative government would have to increase the Goods and Services Tax (GST) rates, and that if elected, far from increasing taxes, the Labor party would roll back the indirect tax, which has been phenomenally unpopular with small business, farmers, and the elderly, all of which have traditionally been core conservative voters.

However, Mr Howard has denied any intention of raising the GST rate: 'There's an unequivocal guarantee there will be no increase in the rate of GST,' he promised. The question is, was anyone still listening?

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