Tax / Economy

Background

One of the most problematic myths dogging the ALP in the lead-up to the 2019 election was the (wrongly held) belief that the Liberals are better economic managers. This is despite the Liberals being in power the last six years and still never producing a budget surplus. The Liberal/Nationals Government continues to manage the ecomomy in the misplaced belief that "trickle-down ecomonics" works - it does not! I agree with historian Rutger Bregman who observed at the Davos World Economic Forum that “almost no one raises the real issue of tax avoidance ... and of the rich just not paying their fair share ... stop talking about philanthropy and start talking about taxes.”

The focus of this page is to bring you up-to-speed on some of the key issues this 45th Australia Parliament will have to grapple with in relation to tax cuts and other major economic issues. I am NOT an economist, but I try to read widely to help my understanding of these issues, as well as drawing on the expertise of my economist friends.

2019 Post-election tax cuts debate

Upon winning the May 2019 election, the Federal Government was adamant that it would push forward with tax cuts, with or without bipartisan support. However, it will need support from at least 4 members of the cross-bench to pass its full tax package if the ALP does not agree to it. This makes the cross-bench critical - which is why it is so important to write to them to encourge them to focus on tax cuts that will benefit people most in need, rather than tax cuts for business or wealth people.

The Government’s income tax package is divided into three parts: the first stage provides a tax offset to benefit low and middle income earners from 2019 to 2022; the second stage raises the 19% tax bracket threshold from $41,000 to $45,000 from 2022; and the third stage flattens tax brackets from 2024 so everyone earning between $45,000 to $200,000 would pay a marginal rate of 30%.

While Labor has agreed to the first stage and is open to the second, it has resisted stage three, demanding to know how much of the tax cuts will flow to high-income earners in a bid to pressure the government to split the bill.

The Australia Institute produced an analysis on 31 May 2019 whch found that he Government’s proposed Stage 3(a) income tax cuts announced in the 2019-20 Federal Budget, to come into effect 2024-25, will overwhelmingly benefit high-income earners with over 50% of the benefit going to the top 20% of taxpayers, while the bottom half only get 12% of the benefit, and the bottom 20% receive a mere 0.2%.

Dealing with superannuation and franking credits

Page under development

Supporting equitable welfare not "wealth-fare"

Page under development

Additional resources / reading

Market forces and capitalism by themselves aren't sufficient to ensure the common good and to limit the concentration of wealth at levels that are compatible with democratic ideals...We want capitalism and market forces to be the slave of democracy rather than the opposite.

- Thomas Picketty, global economist

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