The Shadier Side of the Budget brought to Light

Polls (and see also) reveal that, generally, Australians are tiring of Coalition rhetoric about Budget emergencies and the harm Labor caused the economy while in Government. Economist Tim Colebatch, in Inside Story, uses the Governments own figures to show that not only is there inherent unfairness in the budget which sits poorly with the electorate, but that the measures are largely insignificant in bringing the budget back to surplus. All the pain for vitually no gain.

Moreover, Colebatch reveals deceptions in the way current spending was allocated to the previous financial year to make it seem as though Labor’s deficit was even higher than we’ve already been made aware. Is this part of the ‘$30 billion budget black hole’ Abbott referred to during the interview with Leigh Sales on the 7.30 Report recently?

No doubt there is room for debate about the economic crisis and the contributing factors to the current levels of debt. However, it would be fair to argue that, if there is really little gain in the short term from all the harsh cuts which disproportionately affect lower income households, there is no point in the burden being imposed in the first place.

If the aim is to reach surplus in the longer term, then sustainable changes to the tax system, incorporating new land taxes, the abolition of negative gearing for short term investment properties, higher tax rates on superannuation earnings and closing of loopholes for trusts and other tax minimisation strategies should be implemented. These measures would result in higher tax revenue and ensure the burden of achieving surplus is more equitably shared amongst citizens. The Senate References Committee on Income Inequality has included investigation of the inequality delivered by the current tax system as a recommendation in its recent report.

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