Think Tank Forecasts More Tax Cuts For Australia In 2004

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

08 July 2003

More tax cuts may be on the cards for the Australian taxpayer next year, according to economic policy think tank Access Economics.

Peter Costello's 2003/4 budget surprised some with income tax cuts amounting to A$2.4 billion over the course of the current financial year. However, with the Australian economy outperforming many of its industrialised competitors and with a general election looming sometime in 2004 or 2005, Access has hypothesised that there is strong evidence to suggest that further tax cuts could become pre-election policy as the Howard administration seeks a fourth consecutive term in office.

The strength of the national economy is such that company profits have surged by 44% compared with the same time last year according to Access, and this has led the organisation to predict that the budget surplus will be higher, by the time the 2004/5 budget comes around, than the government's forecast of A$1.3 billion.

However, government ministers have sought to play down the prospect of further tax cuts, and some have warned that Australia's commitment to restoring political stability in the Solomon Islands by sending troops and police there, coupled with the ongoing costs of coping with drought affected areas could weigh heavily on government expenditure in the coming months.

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