Top end of town pays $57bn tax

Original article by Michael Roddan
The Australian – Page: 4 : 24-Apr-19

Data from the Australian Taxation Office shows that nearly 430,000 people had taxable income of at least $180,000 in fiscal 2017, an increase of 26 per cent since fiscal 2013. The total net tax they paid increased from $43 billion to $57bn. There was also a 17 per cent increase in the number of people with taxable income of $37,000 to $80,000, with their share of the total tax take rising from $47bn to $62bn. Tax cuts have been a key focus of the election campaign, but economics professor Richard Holden says a simpler option is to peg the tax system to wage inflation.

CORPORATES
AUSTRALIAN TAXATION OFFICE, UNIVERSITY OF NEW SOUTH WALES, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Labor taxes could hinder economy

Original article by Matthew Cranston
The Australian Financial Review – Page: 8 : 16-Apr-19

The consensus among economists would seem to be that the Coalition’s tax policies will be better for the economy over the medium- to long-term than those of Labor. However, Labor’s short-term tax cuts for low-income earners could provide a stimulus for the economy at a time when it appears to be slowing. AMP’s chief economist Shane Oliver says the impact of Labor’s tax policies will depend on what it does with the extra revenue that it raises.

CORPORATES
AUSTRALIAN LABOR PARTY, AMP LIMITED – ASX AMP, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Tax cut plan needs $40b off spending

Original article by John Kehoe, Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 16-Apr-19

Finance Minister Mathias Cormann is confident that the Coalition can reduce government spending to about 23.6 per cent of GDP over the next decade, as outlined in the April 2019 Budget. Danielle Wood of the Grattan Institute warns that this would require spending to be cut by $40bn a year in order to finance tax cuts and retain a surplus. Meanwhile, shadow treasurer Chris Bowen has described the second and third stages of the government’s tax cuts package as "utterly unsustainable, unaffordable and irresponsible". Labor supports the first stage of the tax cuts, and Bowen says further cuts will be considered in the context of each Budget.

CORPORATES
AUSTRALIA. DEPT OF FINANCE, GRATTAN INSTITUTE, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY

Tax gamble hits most workers

Original article by Paul Kelly
The Australian – Page: 1 & 4 : 15-Apr-19

The Coalition has released data which suggests that low- and middle-income earners will be better off under the government’s tax policy than that of Labor. The tables indicate that people with annual income of $80,000 in 2024-25 will be $875 a year better off under the government rather than Labor; this rises to $2,125 a yearly for those who earn $100,000 and $5,705 a year for those whose income is $140,000. The figures are based on expectations that all three stages of the government’s tax cuts will be passed, reducing the marginal tax rate for the average worker to 30 per cent. Labor opposes the second and third stages of the tax cuts.

CORPORATES
LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY

Shorten digs in over franking

Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 15-Apr-19

Opposition Leader Bill Shorten says that providing cash refunds for excess franking credits currently costs $6bn a year, and this is projected to rise to $8bn in coming years. Shorten has described the franking credits system as a "gift" for people who have paid no income tax, and the money should instead be used to fund services such as healthcare. Meanwhile, shadow treasurer Chris Bowen will use a speech on 15 April to argue that the Coalition’s proposed income tax rate of 30 per cent for most workers is unfair and regressive, and that the third stage of its tax cuts package could see the Budget return to deficit in 2024-25.

CORPORATES
AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN COUNCIL OF SOCIAL SERVICE, CENTRE ALLIANCE

Tax attack kicks off campaign

Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 8 : 12-Apr-19

The federal government has released Treasury modelling which suggests that tax revenue would rise by $387bn over the next decade if Labor wins the election on 18 May. Treasury estimates that Labor’s plans to scrap the second and third stages of the government’s income tax cuts package would increase the tax take by $230bn, which is consistent with Labor’s own estimate of $226bn. The modelling also shows that Australia’s tax-to-GDP ratio would rise to a record 25.9 per cent over the next decade if Labor wins the election.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Labor to have higher tax burden but bigger surpluses, says Bowen

Original article by Phillip Coorey
The Australian Financial Review – Page: 4 : 10-Apr-19

Shadow treasurer Chris Bowen will use his Budget reply speech on 10 April to argue that the federal government could not deliver on its tax cuts package while retaining a surplus over the next decade. He will state that the government’s projected surpluses in coming years are based on spending cuts elsewhere in the Budget starting in the 2023-24 financial year. Bowen will also note that tax revenue would be higher under a Labor government, but it would still be low compared to other OECD nations and some previous Coalition governments.

CORPORATES
AUSTRALIAN LABOR PARTY, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, KPMG AUSTRALIA PTY LTD

Nurses taxed $2000 more under Labor

Original article by John Kehoe
The Australian Financial Review – Page: 1 & 6 : 8-Apr-19

Taxation is set to be a key issue during the upcoming federal election, with Prime Minister Scott Morrison stating that the Coalition will drive economic growth via lower taxes. Labor in turn has criticised the Coalition’s income tax package, arguing amongst other things that it favours people on high incomes and it will not be fully implemented until 2024. Meanwhile, analysis suggests that the average full-time worker who is earning $100,000 a year in 2024 would be more than $2,000 a year worse off under Labor’s tax policy.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, LIBERAL PARTY OF AUSTRALIA, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC

Shorten’s magic pudding

Original article by Simon Benson, Joe Kelly
The Australian – Page: 1 & 4 : 4-Apr-19

Tax relief for Australians with annual income of less than $40,000 will be a key focus for Labor leader Bill Shorten in his Budget reply speech on 4 April. Workers whose income is below this threshold will be offered more generous tax cuts than those outlined in the Budget. Meanwhile, the federal government has announced that the one-off cash payment cash for pensioners, single parents and carers to offset rising energy costs will be extended to Newstart recipients. This will add about $80m to the cost of the Budget measure.

CORPORATES
AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF FINANCE

Flatter scales an incentive to work more

Original article by John Kehoe
The Australian Financial Review – Page: 1 & 8 : 4-Apr-19

Labor contends that the 10-year tax cuts package outlined in the April 2019 Budget is regressive as it will reduce the tax burden of people on high incomes. The current income tax brackets would be replaced by just three in mid-2024. University of Canberra labour economist Phil Lewis argues that while the tax system would be slightly less progressive under the Coalition’s plan, it would reduce the disincentive to earn more. Sinclair Davidson from the Institute of Public Affairs in turn says that flatter personal income tax rates would reduce bracket creep.

CORPORATES
AUSTRALIAN LABOR PARTY, UNIVERSITY OF CANBERRA, INSTITUTE OF PUBLIC AFFAIRS LIMITED, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY