In a speech to the Tax Institute and Chartered Accountants (Australia and New Zealand) in Sydney this morning, which is no doubt going to kick on into the underground rave party of the century this afternoon, Hockey outlined a plan to cut personal income tax rates if the Coalition win the next election.
His comments were interpreted as a sign the government may be preparing the ground for GST changes – extending the GST to healthcare – that it could take to the next election.
Increased investment in offshore regions such as Asia by Australians could pose a high risk for Australian businesses and Australian jobs, Treasurer Joe Hockey has warned practitioners.
But with the commodities boom a fading memory, and the national accounts burdened by a number of Labor-inspired spending commitments, the Abbott government’s room to manoeuvre on taxes is severely restricted.
“What Joe has been signalling is the government’s intent to deal with the issue of bracket creep”, he said.
Titled the “Economic Case for Personal Income Tax Cuts”, it lays the groundwork for putting income tax cuts at the centre of the government’s re-election strategy. “I confess I find it unappealing to dress up increased tax and spending as tax reform, especially if it’s the Commonwealth raising taxes to help states increase their spending”, he said. “For every extra dollar they earn, they will be taxed at 39 cents, including the Medicare levy, so the reward for effort is to move into a higher tax bracket to pay more tax”.
Greens treasury spokesman Adam Bandt said the mooted tax cuts could mean the budget never returns to surplus.
Bracket creep occurs when people are pushed up into higher tax brackets merely as a result of wage inflation.
He hinted the relief would be focused at the low and middle end of the income system and contain changes to welfare as well.
“What is clear is that only a government that is serious about budget fix can deliver lower taxes over time”, said Mr Hockey.
So it’s not a surprise he’s spruiking income tax cuts for us all, including the rich.
“That’s exactly what was promised prior to the 2013 election”, Mr Bowen said.
Mr Daley said even if the Federal Government managed to convince the states to broaden the base of the GST, it would not be left with enough revenue to pay for significant cuts to income tax.
At a meeting with State Treasurers on Friday he announced at the GST would be applied to all online imports into Australia from 2017.