The Australian Taxpayers’ Alliance (ATA), a 75,000+ member grassroots advocacy group representing Australia’s taxpayers, today called on both major parties to follow New Zealand opposition leader Simon Bridges, who announced that his Nationals party would index tax brackets to inflation. Bridges intends to follow Canada’s Trudeau government in eliminating inequitable ‘bracket creep’ which penalises Aussie and Kiwi families with a tax hike ‘by stealth’ every year as inflation moves them into higher tax brackets even if there is no rise in their real earnings.
“With low income workers earning between $37,500 and $46,500 copping an effective pay cut of over $1,300 in 2018-19 alone, it’s clear that bracket creep takes money out of the pockets of those of us who deserve it the least.” Said Satya Marar, ATA Director of Policy.
“While we welcome the Morrison government’s plan to lift the top threshold of the 32.5 and 19 percent tax brackets by 2022 as it will provide some relief, taxpayers will still be left with a raw deal until tax brackets are indexed completely to inflation every year.
“Alcohol, tobacco and fuel taxes are indexed to inflation twice a year. The federal government’s inconsistency in failing to index income tax to inflation at least once every year makes no sense.
“This is not an issue of left vs right, but of right vs wrong. Both Labor and the coalition have expressed support for sensible tax reform, presenting a rare opportunity for bipartisanship in delivering a fair deal for all Australians which will be crucial for the credibility of any party that hopes to succeed at this year’s federal election. It was after all, Justin Trudeau’s father who abolished bracket creep in Canada.
“Bracket creep discourages employment, innovation and skills acquisition, while encouraging tax avoidance. It harms transparency, accountability and our very democracy itself by increasing the tax burden without committee hearings, negotiations, public submissions, or any form of dialogue about the merits or cons of higher tax rates.
“The ATA has long campaigned against bracket creep and we urge both sides of politics to put their differences aside and adopt this sensible, fair and badly needed tax reform. If the Canadians and Kiwis are capable of seeing sense, there is no reason why Australia’s major parties can’t.”