Australian Tax Reform
Debt, Death & Taxes
16th October 2002 Robert Camilleri
The Conservative government doctrine is essentially defined as the party of tax relief. But now conservatives have converted themselves into the party of debt retirement. The conservative government has lost interest in tax cutting and instead wants to devote the surplus tax payments and asset sales over the next 3 years to paying down the national debt. The Howard-Costello government, seen as militant debt hawks, has announced their goal is to retire the entire national debt by 2005.
Has this government forgotten all of the economic and political lessons of the past 20 years? Take the American experience of the Reagan Government, they used surpluses to cut marginal tax rates, which is the most economically productive use of tax surpluses. Moreover, financing Social Security privatization, and tax reform, as much of the rest of the world is now doing, would enhance the long-term growth potential of the Australian economy substantially more than retiring Government Bonds.
This country is on the brink of economic utopia, and the real worry is that this government is squandering a once-in-a-lifetime opportunity to position Australia to have a positively funded balance sheet with continual reduction in taxation. Our leaders need to address the inequality of our federal tax system, the individualist and non nationalist State tax systems and ever increasing burden local governments are facing to fund their own budgets. This is not to mention the inadequately funded retirement programs and bracket creep, that nearly all Australians recognise as economically dysfunctional.
The Federal Government has nearly $15 billion sitting with the Reserve Bank in cash, add to this the sale of Telstra, which would net around $30 billion and based on current government projections the government will have more than $60 billion in cash by 2005. Just looking at the cash surpluses not including asset sales, if the
16th October 2002 Robert Camilleri
The Conservative government doctrine is essentially defined as the party of tax relief. But now conservatives have converted themselves into the party of debt retirement. The conservative government has lost interest in tax cutting and instead wants to devote the surplus tax payments and asset sales over the next 3 years to paying down the national debt. The Howard-Costello government, seen as militant debt hawks, has announced their goal is to retire the entire national debt by 2005.
Has this government forgotten all of the economic and political lessons of the past 20 years? Take the American experience of the Reagan Government, they used surpluses to cut marginal tax rates, which is the most economically productive use of tax surpluses. Moreover, financing Social Security privatization, and tax reform, as much of the rest of the world is now doing, would enhance the long-term growth potential of the Australian economy substantially more than retiring Government Bonds.
This country is on the brink of economic utopia, and the real worry is that this government is squandering a once-in-a-lifetime opportunity to position Australia to have a positively funded balance sheet with continual reduction in taxation. Our leaders need to address the inequality of our federal tax system, the individualist and non nationalist State tax systems and ever increasing burden local governments are facing to fund their own budgets. This is not to mention the inadequately funded retirement programs and bracket creep, that nearly all Australians recognise as economically dysfunctional.
The Federal Government has nearly $15 billion sitting with the Reserve Bank in cash, add to this the sale of Telstra, which would net around $30 billion and based on current government projections the government will have more than $60 billion in cash by 2005. Just looking at the cash surpluses not including asset sales, if the