The Australian Democrats today welcomed the Coalition’s belated acceptance of the Democrats argument for greater equity and workforce incentives in income tax.
“Again and again the Democrats have argued that the Coalition’s income tax priorities have been skewed towards higher income Australians. Low income Australians needed most help.
“The Coalition’s announcement today that they will increase the effective tax-free threshold and lift the 15% tax threshold is good news on two fronts - tax relief for lower income Australians and an incentive for greater workforce participation,” said Senator Andrew Murray, the Democrats spokesperson for Taxation.
“We have repeatedly moved fully costed amendments to lift the tax free threshold and to index income tax rates. Each time the Coalition and Labor have voted them down.
“The Democrats Five Pillars Taxation Reform Plan focuses on :
• Raising the tax free threshold
• Indexing tax rate thresholds
• Broadening the taxation base
• Reviewing and addressing negative tax – welfare interactions; and
• Lowering taxation rates and raising taxation thresholds
“The weakness in the Coalition’s taxation announcement is that it does little to simplify the tax system by broadening the base, and the tax system will still be subject to high rates of ‘churning’ - where tax already paid is then gifted back to taxpayers much later.
“Hopefully the Coalition’s election announcement will in turn spur Labor on to announce increased income tax simplicity and equity,” concluded Senator Murray.
