TAXING TIMES

Australians pay too much income tax. I know that is like telling you how to suck eggs but it is true. We wore the introduction of GST – and I supported it – but we haven’t got the income tax relief we deserved despite that ten per cent surcharge on almost everything. Even funerals.

There were reports around overnight that the Federal Government is heading for an amazing surplus of more than ten billion dollars in the lead up to the next Budget. Maybe twelve billion. That’s 1200 million dollars! Gimme a break. Gimme a tax break.

A top rate of 47% plus the 1.5% Medicare levy is a disgrace. It is a disincentive for people to work their buns off. I know I am in the top tax bracket but this is not a personal whinge. I have the straightest most honest accountant and I pay everything I have to – unlike some of our richest people who use their accountants and off-shore schemes and family trusts to avoid paying taxes. Some of them would not pay ten cents in the dollar. And, I guess, their clever, expensive, accountants are tax deductible.

I saw a survey that shows Australians pay more personal income tax than most countries in the world. Across the ditch, in New Zealand, it is 29%. In the US the top rate is 41%. The only places higher than us are Nordic countries like Denmark and Sweden where top rates of more than 50% are used to fuel hefty social services.

I am starting to think that with the river of money from GST we could bring in a flat tax of 30% . It would simplify the system. It would make us more competitive with other countries. It would boost incentive. It would make people want to work and that would boost our economy. And with more money for us to spend the Federal Government – and the states – would get billions more from GST.

I am no economist. But it makes sense to me. As I said: the GST, “the user pays tax” was supposedly designed to lower personal income taxes. It has not really happened. It is time, Mr. Costello – to steal a line from Gough Whitlam. It’s Time. Bite the bullet on what may be your last Federal Budget before you become Prime Minister. Or Quit.

Tuesday, November 29, 2005

©Copyright Derryn Hinch 2005