Senator John Cherry
Democrats Senator for Queensland
Australian Democrats spokesperson for Regional Development & Services
| Dated: 12 May 2004
Portfolio: Regional Development & Services
Related: Taxation, Finance & Corporate Affairs
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Tax cuts leave open new city/country divide
| The $4 billion of tax cuts for high income earners will favour capital city residents over rural residents because incomes are much lower in the bush, according to the Australian Democrats.
The Democrats said that up to 90% of rural Australians would be denied access to the tax cuts because they were earning less than $52,000, while a much higher proportion of city dwellers would get the tax cuts.
Senator John Cherry, Democrats spokesperson for Regional Development said, "57 of the 64 localities with an average income above $50,000 are metropolitan, but 119 of the 134 localities with an income below $30,000 are rural."
"The tax cuts will go disproportionately to urban Australia, adding to the many benefits in terms of extra services and tax cuts that the Howard Government has already given to high income earners.
"Rural Australia, where the average incomes are 19% lower than the capital cities, will see little of the $42 a week tax cut the Howard Government is delivering to people earning over $80,000 a year.
"Rural Australia suffers because of under funding to health and education services, yet rural Australia is also missing out on tax cuts.
"Ironically, boosting the incomes of high income earners in the cities, already overspending on the back of the boom in housing prices, will put great pressure on interest rates.
"Even as the Treasurer rose to speak last night the OECD in Paris was releasing on to its web site a forecast for the Australian economy which also sees inflation rising next year, and the Reserve Bank of Australia increasing interest rates as a consequence.
"A Budget that ignores the regions, does little for health and education, boosts the incomes of high income earners and puts pressure on interest rates is very bad news for the bush," Senator Cherry concluded.
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