Taxpayers respond to Labor's budget reply

MEDIA RELEASE: Taxpayers respond to Labor’s budget reply

5/04/2019

  • More relief for low-income taxpayers is welcome and won’t damage the budget bottom-line
  • Housing tax and retiree tax hikes based on intergenerational and class warfare will devalue shares and property without building a fairer society
  • The coalition’s tax reforms do not move Australia towards a flatter tax, but we wish they did
  • Labor must legalise nicotine vaping to give low-income smokers hit by high and regressive tobacco taxes a safer alternative
  • Labor must be clear about the cost of their climate policy and who will pay for it

The Australian Taxpayers’ Alliance (ATA), a 75,000+ member national grassroots advocacy group representing the nation’s taxpayers, today welcomed Bill Shorten’s proposal to expand the tax offsets that the government offered to low income workers, but condemned Labor’s changes to negative gearing and lack of clarity on how healthcare and education funding will be used to guarantee improved outcomes.

“Taxpayers welcome more relief for those on low-incomes.” Said ATA Director of Policy, Satya Marar. “Modelling by ATA deputy director and economist John Humphreys shows that PM Morrison’s tax cuts will decrease revenue by $122 billion over 11 years, not $158 billion as the government overestimates. So we welcome Labor’s plan to further relieve those who work hard and do it tough.

“But Bill Shorten is wrong to say that the government’s plan is a ‘flat tax’ and that flatter taxes are ‘radical’ or ‘far right’. Singapore’s flatter income taxes encourage innovation and attract the best and brightest from around the world while allowing for a generous social safety net.

“To describe the Singaporeans and nearly half the American population who voted for flatter taxes as ‘far right’ is an insult to our major trading partners and the intelligence of working Australians.

“If Bill Shorten wants a fairer society, he should legalise proven safer alternatives to cigarettes such as nicotine vaping so low-income smokers who pay high and regressive tobacco taxes but can’t beat their addiction have a viable alternative as recommended by the progressive McKell Institute.

“Shorten also can’t claim to trump a fairer housing policy when it will drive up rents and smash property values for mum and pop investors and retirees who don’t have the ability to easily shift their investments like wealthy, professional investors do.

“Shorten’s negative gearing changes will create a generation of stranded assets as downsizing retirees can no longer pay off their mortgage by selling their property at a reduced value to purchasers who can’t negatively gear. No amount of intergenerational or class warfare rhetoric will mute the disastrous impact of this policy and Labor’s franking credit changes on those who’ve worked hard and paid tax all their lives.

“It’s also absurd to describe penalty rate changes from the Fair Work Commission as ‘arbitrary’ when Mr. Shorten himself lobbied for this independent body to determine wage conditions. Labor can boast about mandated wage hikes which will drive up costs for business but should at least be honest about it.

"Taxpayers also want some guarantee that extra funding for education and healthcare will go towards fixing key structural issues, with Australian STEM graduates struggling to find work despite skills shortages in these fields, and worse academic outcomes amongst Australian school students in Maths and Science despite far greater per-student funding for schools than countries like Singapore and Kazakhstan who are beating us.

"Labor must also be clear about who will end up paying for their climate policy, with emissions reduction mandates and subsidies ultimately paid for by consumers and taxpayers through higher costs that disproportionately hurt poor and middle-class Australians and our families.”

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