Labor worries tax cuts will aid the rich

BRINGING tax cuts forward due to the COVID-19 pandemic should not favour highincome earners, Corangamite Labor MP Libby Coker says.

Ms Coker said Labor was prepared to engage with the federal government to bring forward tax cuts due to start in 2022-23, which are estimated to be worth about $5bn, but raised concerns the big winners would be those earning more than $100,000.

“There is little evidence that these tax cuts, unlike the boosts to JobKeeper, JobSeeker or one-off payments to age pensioners which were aimed at those out of work and at the bottom of the economic ladder, will stimulate the economy substantially,” Ms Coker said.

“It would be far better to invest money in restructuring the economy, infrastructure and jobs for the several million who are and will be unemployed.

Ms Coker said given limited national resources and the social consequences of the pandemic, Labor was reluctant to bring forward tax cuts that favoured those well off.

“The tax cuts were passed at a time when the government was forecasting net zero debt by 2029-30 and budget surpluses. Now, debt and deficits aren’t necessarily a bad thing, however with so many other demands for government assistance, it is not the time to be giving tax cuts to the wealthy.

“It will simply mean cuts to schools, to health, to welfare and childcare.”

Victorian Liberal Senator Sarah Henderson said decisions regarding the legislated income tax cut timetable would be outlined in the October budget.

“The Morrison Liberal government is proud to have delivered on its promise made at the last election for a tax system which delivers lower and fairer tax rates so that hardworking Australians can keep more of their hard-earned income,” Senator Henderson said.

“These tax cuts have saved Australian workers and families over $158bn via the creation of the $45,000-$200,000 tax bracket, which will result in 94 per cent of taxpayers paying a marginal rate of no more than 30 cents in the dollar.”

Ms Coker said that stage three of the tax cuts, slated to begin in 2024-2025, “mean that someone on $200,000 a year would gain $4415 a year”.

“I believe that there are better ways to boost the economy and encourage growth than giving already well-off citizens a large handout, at the expense of our ability to provide services and jobs,” she said.