Tax Blow To Howard In Oz Election

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

01 September 2004

With the Australian election campaign now getting under way, new research suggests that many poorer people missed out on the government's May budget tax cuts, handing an advantage to the ALP.

The federal parliamentary library has matched the May tax cuts to new electoral constituencies, and says that hardly any marginal seats are big winners from the Government's tax package. In 15 of the ruling Coalition's 20 most marginal seats, many more voters missed out on the May budget tax cuts than the national average, says the research. These tax-sensitive seats are clustered mainly along the eastern seaboard, from the Townsville-based electorate of Herbert, in northern Queensland, to Gippsland, east of Melbourne.

ALP leader Mark Latham reaffirmed over the weekend his goal to provide tax cuts to those on less than $52,000 a year. "People above $52,000 had tax relief in the last budget," he said. "We want to do something for the great bulk of the taxpayers – the 80% or 90% who are under $52,000." Labour polls have indicated that 64% of marginal seat voters say they have received nothing from the government's largesse.

A shift in some marginal seats may be all the ALP needs to secure the election: the latest Newspoll survey, taken last weekend when PM John Howard announced that the election would be held on October 9, has the parties neck and neck, although once second preferences are taken into account, the ALP comes out on top.

Mr Howard took a risk in announcing the election when facing damaging disclosures over the alleged throwing overboard of children from asylum-seekers boats during the last election campaign. Still, he believes that the public is fed up with that affair, and a rise in his ratings in the last week suggests that he is right.

When he called the election on Sunday, Mr Howard said there was no doubt the Coalition were "the underdogs".

In the first hours of the campaign, Mr Howard has been trying to shift the focus away from the 'children overboard' affair to economic issues such as interest rates and tax policy, so the new research will have come as an unwelcome blow.

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