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Labor Backing The Liberals Trickle Down Nightmare (Read 2184 times)
whiteknight
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Labor Backing The Liberals Trickle Down Nightmare
Jul 28th, 2021 at 7:38am
 
Stage 3 tax cuts to cost $184 billion as decade of deficits looms   Sad
Brisbane Times
July 28, 2021


Tax cuts to start in 2024 will cost the federal budget more than $184 billion by early next decade, new independent analysis shows, as the International Monetary Fund urges all governments to start rebuilding their fiscal buffers by making their tax systems more progressive.

The analysis, carried out by the Parliamentary Budget Office after a request from the Australian Greens, shows the top fifth of the nation’s taxpayers will get $138.2 billion of tax relief between 2024-25 and 2031-32.

The stage three tax cuts, now supported by the Coalition and Labor, will cost $184 billion by 2031-32.
The stage three tax cuts, now supported by the Coalition and Labor, will cost $184 billion by 2031-32.CREDIT:GABRIELE CHAROTTE

Labor, after a bruising internal debate, this week agreed to keep the government’s third stage of tax cuts, which were announced in 2019 when the federal government was expecting ongoing budget surpluses through to and beyond the 2030s.

Since then, the coronavirus pandemic has delivered the nation’s first recession in three decades while the budget will show its largest deficit on record in the just-completed financial year – more than $140 billion.

Under the stage-three cuts, the 37 per cent tax bracket will be abolished, the top 45 per cent bracket will start from $200,000 and the 32.5 per cent rate will be cut to 30 per cent for all incomes between $45,000 and $200,000.

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The PBO analysis shows in their first year the cuts will cost $15.7 billion, of which 78 per cent will flow to the top fifth of all taxpayers. By 2031-32, the cuts will cost $30.5 billion, of which 71 per cent will go to the top 20 per cent of taxpayers.

Of the $184.2 billion, people earning more than $180,000 a year will get $83.2 billion in tax relief while another $26.5 billion will flow to those earning between $150,000 and $180,000.

People earning less than $60,000, who account for about 40 per cent of all taxpayers, will share in $3.1 billion in tax relief between 2024-25 and 2031-32.



Through the period between 2024 and 2031, the government is expecting the budget to remain in deficit.

Greens leader Adam Bandt accused Labor of abandoning its values by supporting the tax cuts.   Sad

Adam Bandt says Labor has abandoned its core beliefs by backing the tax cuts.


“This is the end of progressive taxation in Australia. With Labor backing the Liberals’ trickle-down nightmare, Gough Whitlam must be rolling in his grave,” he said.   Sad

“Tax cuts lead to spending cuts. These tax cuts for the 1 per cent will rip a hole in the budget and turbo-charge inequality in Australia.”

Treasurer Josh Frydenberg said Labor could not be trusted to maintain its new position given shadow treasurer Jim Chalmers had labelled the tax cuts as “offensive”.

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“Now Labor begrudgingly say they support them. No one should believe them,” he said.

Dr Chalmers said the government had announced $200 billion worth of spending over the past two budgets without attempting to cover their cost.

He said Labor would be more responsible with its spending than the Coalition.

“We think we can get better value for money for the Australian people. That means spending it more effectively on some of the priorities that we’ve identified,” he said.

AMP Capital chief economist Shane Oliver said circumstances had changed since the tax cuts were announced, but they primarily returned bracket creep and without the cuts a range of disincentives would develop within the income tax system.

AMP Capital chief economist Shane Oliver says without the stage 3 tax cuts, far more Australians will be pushed into higher tax brackets.


“If they are not implemented we will see more and more taxpayers fall into top tax brackets for which they were not intended and end up paying an ever-increasing share of their income in tax,” he said.

“And we will likely see an increasing share of tax revenue raised by direct tax on income – which distorts economic decisions – whereas we should be reforming the tax system to rely less on direct taxation of income.”

Dr Oliver noted while revenue climbed to record highs over the coming decade even with the tax cuts, spending as a share of the economy had been permanently increased by the pandemic response.

“So on this basis there is a case to focus more on containing spending when it comes to deficit repair,” he said.

RELATED ARTICLE
Josh Frydenberg has said little about what the government’s response to the latest intergenerational report will be.
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Grappler Truth Teller Feller
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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #1 - Jul 28th, 2021 at 8:31am
 
We need a 90% bracket to keep the really fat bludgers tame... and the abolition of quite a few tax concessions on 'investment'.....
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whiteknight
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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #2 - Jul 28th, 2021 at 8:43am
 
“Tax cuts lead to spending cuts. These tax cuts for the 1 per cent will rip a hole in the budget and turbo-charge inequality in Australia.”   Sad
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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #3 - Jul 28th, 2021 at 10:39am
 
Labor just handed the Greens and independants a large number of seats in both houses.
Who were the fools who put Albineasy in?
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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #4 - Jul 28th, 2021 at 12:44pm
 
whiteknight wrote on Jul 28th, 2021 at 8:43am:
“Tax cuts lead to spending cuts. These tax cuts for the 1 per cent will rip a hole in the budget and turbo-charge inequality in Australia.”   Sad



As I said - rectify 'bracket creep' with a simple annual calculation, and then review all tax concessions available and in what areas of economic activity.  Some controls over franked dividends being 'misinterpreted' and thus ensuring nobody pays tax are mandated.  Likewise superannuation that massively benefits a few while ensuring the small fish will still have nothing... their own fault, no?
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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #5 - Jul 28th, 2021 at 12:52pm
 
It's not really a big deal ... other than yet another example  of Labor wimping it on policy.  Wink

Changes to marginal tax rates

The legislation gives effect to the following changes to the personal income tax thresholds — and rates of tax applicable to them — which the Treasurer announced on 8 May 2018 as part of the 2018/19 Federal Budget:

From 1 July 2018: Raising the lower threshold for the 37% tax bracket from $87,000 to $90,000

From 1 July 2020: Raising the upper threshold for the 19% tax bracket from $37,000 to $45,000, changing the 32.5% tax bracket from $37,001-$90,000 to $45,001-$120,000 and raising the lower threshold for the 37% tax bracket from $90,001 to $120,001

From 1 July 2024: Changing the 32.5% tax rate to 30%, raising the upper threshold for the 30% tax bracket from $90,000 to $120,000, removing the 37% tax bracket and raising the 45% lower threshold from $180,000 to $200,000


...
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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #6 - Jul 28th, 2021 at 3:34pm
 
Well if this means a few more seats for the greens, then that will be good news.  Maybe its time more people started voting for greens and other independents.  Instead of the labor or liberal all the time.   Smiley
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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #7 - Jul 28th, 2021 at 5:15pm
 
Meanwhile ... more wimping it:

Federal Labor set to dump multibillion-dollar cancer and dental pledges



By Rob Harris
July 28, 2021 — 5.00am

Federal Labor is set to swing the axe on its multibillion-dollar pledges for free cancer treatment and dental care for pensioners in an effort to slimline its election spending promises.

The two signature health policies, announced under former leader Bill Shorten ahead of the last election, are likely to be formally scrapped in the coming months following the federal opposition’s decision to cut off the key sources of revenue that would have funded them.


...

Shadow Minister for Health and Ageing Mark Butler and Opposition Leader Anthony Albanese.CREDIT:ALEX ELLINGHAUSEN

Labor went to the 2019 poll with a $2.3 billion package to tackle out-of-pocket costs and waiting lists for cancer patients. It included $600 million to improve access to and affordability of diagnostic imaging, with up to six million free cancer scans funded through Medicare and $433m to fund three million free consultations with oncologists and surgeons for cancer patients.

In the final weeks of the election campaign Labor followed up with a $2.4 billion plan that would have given up to three million older Australians access to free essential dental care, covered by Medicare, every two years.

The opposition has faced fierce criticism from its progressive flank for its decision on Monday morning to reverse its position on the third stage of the Morrison government’s legislated tax cuts, which are likely to cost the budget more than $17 billion annually.

Australian Council of Social Service chief executive Cassandra Goldie said it was “unbelievable” that in the middle of a third round of lockdowns, with more than a million people on social security payments excluded from disaster payments, Labor had paused to discuss whether high-income earners should get a tax cut of $180 a week.

“We’ve been here before – years of unaffordable tax cuts set us up for the savage cuts to social security, health and other essential services in the 2014 budget,” she said.

Several members of Labor’s shadow cabinet told this masthead that both of Labor’s key health policies of 2019 were unlikely to proceed to Opposition Leader Anthony Albanese’s election platform. They said it was simply because the party was dumping its major sources of revenue-raising, including scrapping franking credits, rolling back high-end tax cuts and winding back negative gearing.

“There is just no way we are going to be able to pay for them this time,” a member of Labor’s shadow cabinet said on the condition of anonymity. “It is the reality of the decisions we have taken.”

A spokeswoman for health spokesman Mark Butler said all policies from the last election were under review.

The Age and The Sydney Morning Herald revealed last May that Mr Albanese had told his shadow cabinet to prepare for a “full reappraisal” of the party’s policies in the wake of the coronavirus induced economic crisis, warning the ALP would face major budget constraints if it wins the next federal election.

He said Labor’s policies must be developed “through a clear-eyed lens of winning the next election’, not how the party would like to address all current issues given that it was not in government.

“At a time when the Morrison government is racking up more than $1 trillion of debt and hundreds of billions of dollars of new spending, every dollar must be spent wisely, carefully and in the interests of the Australian community,” Mr Albanese told reporters while in Brisbane on Monday.

“We’ll have much more to say about our policies going forward. But our policies for the next election will be the ones that we announced during this term.

“Will a Labor government do more than a Coalition government on education and health? You bet we will.”

Both Mr Albanese and shadow treasurer Jim Chalmers have said Labor would likely crack down on multinational corporations if it won the next election to help repair the federal budget. But several sources with knowledge of policies discussion said those measures would be unlikely to net more than $3 billion over the forward estimates.

www.theage.com.au/politics/federal/federal-labor-set-to-dump-multibillion-dollar...
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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #8 - Jul 28th, 2021 at 5:19pm
 
whiteknight wrote on Jul 28th, 2021 at 3:34pm:
Well if this means a few more seats for the greens, then that will be good news.  Maybe its time more people started voting for greens and other independents.  Instead of the labor or liberal all the time.   Smiley


In the last Federal Election the Greens policy platform was different to that advertised today. There were several things I could not vote for which don't appear on their website and I would need to have it confirmed that they are not just hidden.
1. Deferring to the UN.
2. Australian Military to fight defensively.
3. Universal Basic Income.
4. Australian Republic is now included. I would want to see the fine print on that.
I cannot vote for any of the above, and the Labor Party may be waking up to the fact that a lot of Australians cannot either.

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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #9 - Jul 28th, 2021 at 11:03pm
 
Of course Labor supports this - it gives them and their mates, as part of the ruling oligarchy, the same opportunity to prosper mightily that they remove from everyone else, thus cementing their dynastic control over society here for generations.

Government of Two Parties, innit?  I guess most of you missed it...
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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #10 - Jul 28th, 2021 at 11:03pm
 
Albo cashes investment property as negative gearing reform scrapped


By Unconventional Economist in Australian Politics, Australian Property at 11:00 am on July 28, 2021

This may seem like a cheap shot. But optics is everything in politics. Only a day after Labor dumped the negative gearing and capital gains tax reforms taken to the past two elections, leader Anthony Albanese sold his Marrickville investment house for $2.35 million, banking a $1.2 million gross profit:

[Albanese] and former NSW deputy premier Carmel Tebbutt sold their Marrickville investment property for $2.35 million.

...

The bullish sale price more than doubles the former couple’s purchase price of $1.115 million nine years ago and comes less than five days before it was scheduled to go to auction.

To be fair, Australian federal politicians have always had a high degree of investment property ownership. Liberal or Labor, it doesn’t matter.

After Labor was punished at the ballot box last election for actually trying to improve housing affordability, it stands to reason that it would pull the policy this time around. Who can blame them? It is far more popular to bribe home buyers with subsidies than to take tax concessions away.

We get the leaders we deserve.

www.macrobusiness.com.au/2021/07/albo-cashes-in-on-investment-property-as-he-scr...

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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #11 - Jul 29th, 2021 at 12:06am
 
...

...
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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #12 - Jul 29th, 2021 at 12:03pm
 
...

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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #13 - Jul 29th, 2021 at 12:14pm
 
...

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Re: Labor Backing The Liberals Trickle Down Nightmare
Reply #14 - Jul 29th, 2021 at 2:51pm
 
Grappler Truth Teller Feller wrote on Jul 28th, 2021 at 11:03pm:
Of course Labor supports this - it gives them and their mates, as part of the ruling oligarchy, the same opportunity to prosper mightily that they remove from everyone else, thus cementing their dynastic control over society here for generations.
Government of Two Parties, innit?  I guess most of you missed it...

Not me, the stench of both laborial parties has been there for years. And still nobody’s offering a valid alternative. Much as I’d like to think it could be the Greens, attending a few of their meetings here convinced me far too many sloppy thinkers are involved from radical Trotskyites to nutty alternatives. If only the majority of the party was made up of members with the intelligence of Bob Brown. So, I’m forced to choose the best independent in the next election, if there is one.


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