Media Release: Australian Taxpayers’ Alliance 2015 Budget Analysis

The FY2015-16 budget represents a mixed-bag for taxpayers, according to an analysis by the Australian Taxpayers’ Alliance. Tax is set to increase by $100 billion over forward estimates, while spending is set to increase by over $60 billion. Spending in FY2015-16 is over $5billion higher than planned by Labor Treasurer Wayne Swan in the 2013 Pre-Election Fiscal Outlook as a result of new spending initiatives with a deficit this year of $35 billion. Top of FormBottom of Form

"It appears that the new benchmark for fiscal prudence is to get the budget deficit under $40bn. That is simply not good enough" said Dr Alex Robson from Griffith University and ATA Academic Fellow

“Despite Joe Hockey crying poor with revenue write-downs, the budget clearly shows that revenue is rising from 23.5% to 25.2% of GDP and the deterioration in the budget deficit is entirely caused by discretionary new spending." said John Humphreys, Deputy Director of the Australian Taxpayers’ Alliance, and a Visiting Lecturer of Economics at the University of Queensland. “It has been eight years since the GFC and there is no reason to be running a deficit at this point in the business cycle. The deficit in 2015/16 and forward estimates continue to add to our unsustainable national debt.” Professor Tony Makin from the Griffith University recently noted that “Australia last lost its AAA credit rating in 1986 when debt to GDP was 24%, not much above where it is now.”

“While the government is to be applauded in trying to reduce the tax burden on small business , introducing a progressive company tax creates a mess of distortion and disincentives. It would have been better to simply reduce the company tax rate to 29% across the board, or even better, reduce it to 25%” concluded Mr Humphreys.

“Australia’s corporate tax rate is already one of the highest in the world - little wonder companies are fleeing in droves.  Cutting the corporate tax rate is the only way for us to be internationally competitive” added Tim Andrews, Executive Director of the Australian Taxpayers’ Alliance. “Furthermore, every report has shown that Joe Hockey’s Ebay Tax will cost more to collect than it will raise. This is just policy foolishness and a capitulation to special interests that will hurt almost every household.

“Overall, the FY2015-16 budget is to be commended for restraining spending as a percentage of GDP, abolishing some ineffectual health-related programs and the marriage counselling trial, not bowing into pressure to hike superannuation taxes, and tightening up aged pension access for those with higher assets. However, the combination of tax hikes and the failure to significantly reign in spending making this a missed opportunity for Australia” concluded Mr Andrews

Media Contact: John Humphreys, Deputy Director, Australian Taxpayers’ Alliance. Mobile: 0404044561

Click HERE for more detailed budget commentary by Mr Humphreys

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