9 May 2017
MEDIA RELEASE: Taxpayers cop a budget bashing
The Australian Taxpayers’ Alliance, a non-partisan grassroots advocacy body representing the interests of Australian taxpayers, today expresses its disappointment in the federal government’s move to increase burdensome taxes while failing to adequately curtail overspending in the FY2017-18 Commonwealth Budget.
“The good news is that Canberra expects to restore the budget to balance by 2020-21. The bad news is how they plan to do it” said Satyajeet Marar, a Research Associate at the Australian Taxpayers’ Alliance. “Policy decisions have increased taxes by 12 billion dollars over forward estimates. The two most concerning proposals are a substantial increase in the medicare levy and a new tax which specifically singles out the 5 largest banks. What the government ignores in its rhetoric that ‘banks should pay their fair share’ is that any cost imposed on a bank is passed on to its customers. A majority of Australians bank with one of the large banks and this levy will hit them where it hurts. The $360 million increase over forward estimates for ‘roll your own’ tobacco is also unconscionable because it will disproportionately cost the poor when smokers already pay well in excess of their cost to the healthcare system.
“Meanwhile, Canberra continues to announce new spending programs. Gonski 2.0 promises 18.6 billion dollars in additional funding for schools despite Australia maintaining a high rate of per-student funding relative to our OECD trading partners and other developed nations. The proposal comes with no concrete guidelines to guarantee that funds will be spent in a way that ensures improvements to educational outcomes, with Australian students lagging behind many of their foreign counterparts in numeracy and other subject areas despite the school funding splashes of previous governments.
“The new budget makes little dent to the size of government spending with no significant cut to middle class welfare such as the family tax benefit, no plans to cut or scrap the multibillion dollar Medical Research Future Fund despite strong private sector investment in medical research and no significant move to cut subsidies to many private industries.
“We commend the government on its limited measures to cut taxes and ease red tape – including a continued commitment to cut the company tax rate, an extension of the small business tax-free deductibility threshold and a National Agreement to induce states to cut red tape holding back their businesses. But these do not go far enough. The 10 year implementation period for reducing our relatively high company tax rate should be shortened to ensure that we remain competitive against world economies including the US, France and the UK announcing their own company tax cuts. The government also needs to index income tax brackets to ensure that Australian workers aren’t hit by ‘bracket creep’ because of increased earnings caused by wage indexation.
“Measures to ease cost of living and improve housing access by allowing first-home buyers to contribute a small portion of their superannuation payments towards a deposit and incentivising state governments to institute zoning reform to increase property supply are welcome. But they are unlikely to resolve the problem without a firm commitment to concrete targets.
“The rhetoric of a government that ‘lives within its means’ is meaningless if it is achieved through new taxes and increased tax receipts through inequitable bracket creep. We urge the government to prioritise taxpayers over special interests by cutting overspending which has caused our 500 billion dollar gross public debt before dipping deeper into our pockets.”
Satyajeet Marar, Research Associate, Australian Taxpayers’ Alliance, email@example.com +61 409 670 378
Satyajeet Marar will be available for in-person interviews & budget-related analysis in Canberra this week.