The waistband of the federal budget deficit has been pulled in a little tighter, but there is still more girth to shed...
Treasurer Scott Morrison yesterday announced that the Commonwealth budget deficit has reduced by $4.4 billion from the forecasted budget in May of 2017. While this was better than expected, more still needs to be done to reduce heavy taxes targeting lower income earners and unnecessary expenditures wasting taxpayers’ hard-earned money.
While Morrison credited this to reduced welfare and transfer payments to individuals, as Judith Sloan points out, increases in company tax revenue are equally responsible. Australian company tax rates are already one of the highest in the world. This cannot be relied upon as more companies move offshore.
Mr Morrison recently insisted, “we are not spending money that isn’t there“. However, that’s exactly what we are doing as long as politicians run a deficit. And that begs the question of how would we stack up against other developed nations in the event of another GFC?
May’s budget increased taxes by 12 billion dollars over the forward estimates. Sure there are more jobs, which is always a positive point, but the government can’t hide the fact that taxes are far too high. Prominently, the six basis-point levy on five of Australia’s big banks (which has been conveniently reworded from ‘tax’) has ignored the trickling down effect that bank taxes have on their customers. The idea that a solution to saving taxpayers’ money is to indirectly tax them, while disguising it as ‘taxing the rich’, just goes to show how out of touch the government is. Do they think we’re oblivious?
The government has also turned a blind eye to the large increases in income tax caused by bracket creeps. Most people are unaware of the stealth tax that is bracket creep. In summary, everyone’s income is taxed every year at different tax rates as their income increases, as a way of ‘creating an equal playing field’. As inflation increases, so do incomes at large, although this increase in income is automatically put in the highest income bracket. This ‘glitch’ in the system is resulting in taxpayer’s paying far too higher taxes, for literally no reason at all. Surprise, surprise, more jobs mean more tax revenue for the government. Scott Morrison needs to reign in on this over taxation, after all the cost of basic living is high enough without further taxing income, of all things?!
Sure the budget deficit is substantially lower, but it’s still a deficit. Since the GFC around 2007-08, our economy has been continually running deficits, causing our debt levels to increasingly swell. The current national total debt is at $551.750 billion — approximately $71.9 million per household.
We simply can’t keep adding to this crazy amount of spending, and we can’t keep taxing the vulnerable. When will our government wake up and realise the only way to move forward is to cut overspending and to truly live within our means’?
Sarah Ray is a Research Associate at the Australian Taxpayers' Alliance
[This article first appeared in The Spectator Australia]