Tax cuts, rorts and a fake debate

October 19, 2022
The stage three tax cuts would cost the budget billions
The stage three tax cuts would cost the budget billions of dollars. Photo: Alex Bainbridge

Federal Labor is softening us up for more cuts as interest rates continue to climb and a recession looms.

Meanwhile, the debate on whether to scrap the stage three tax cuts is continuing as more people realise how the $254 billion (over 10 years) could be spent.

In a gob-smacking spectacle of privilege, the former British Prime Minister Liz Truss cut taxes for the rich, only to abandon them shortly after. She has just resigned, 45 days after being appointed. Meanwhile, millions of half-starved Britons face a freezing winter because they cannot afford heating.

The establishment media here want Prime Minister Anthony Albanese to deliver on his election promise to implement the stage three tax cuts.

The Daily Telegraph said on October 14 that the PM “intervened” to stop the treasurer from shelving the promised tax cuts. It said Albanese and Treasurer Jim Chalmers are supposedly at each others’ throats.

There may be some internal debate — but it’s more likely to be about tactics, not policy.

The article was laden with quotes from unnamed sources and rife with speculation, helping create an atmosphere of uncertainty as we are softened up for bigger cuts to come.

One unnamed source said: “It’s about preparing people for tough decisions,” which could include a “broader tax change”.

That’s code for making workers and the poor pay for the large debt built by the Coalition while trying to avoid the kind of backlash Truss has faced.

Here’s a reminder of what the tax cuts involve. They will mainly benefit the rich — those earning more than $200,000 a year will get $9000 in tax cuts, while those on $160,000 will receive $4675.

Those on $90,000 will only receive around $1000 in tax cuts. This will have little impact on the housing interest rate hikes or the 20-year high gas and electricity prices.

The Australian Council of Trade Unions said: “Workers with a $500,000 mortgage have seen their monthly repayments go up by $687 since the Reserve Bank began raising interest rates this year”. That's a rise of more than $8000 a year.

The price of petrol averaged 182.5 cents a litre for the week ending 9 October according to a Guardian report, however this is likely to rise again.

If you are among the nearly 10 million workers earning below minimum wage, or one of the 3 million living in poverty, the tax cuts won’t benefit you.

That means that more than 50% of the population will receive no benefit.

In that case, why are we even debating a saving of $254 billion over 10 years, when scrapping the tax cuts could mean more funds for public housing, raising JobSeeker and building cheaper renewable energy. We can all think of much better uses for that money.

The reason Labor will push ahead with the cuts is that they are a way of subsidising the rich, especially smaller producers.

Former PM Scott Morrison, with the Labor Opposition’s support, wanted to placate their richer supporters in the lead up to the March elections.

Really, the tax cut debate is fake, because Labor supported the cuts being made law, and they don’t want to upset the same rich supporter base.

Green Left will continue to expose the establishment media rorts and rubbish rationale for agreeing to such a hand-out to the rich.

That’s why, even when funds are tight, you are better off spending $5 or $10 a month on a Green Left supportership. We focus on building the struggles against the hypocrites and corporate liars who claim concern about the cost-of-living rises, but refuse to tackle the system’s privilege.

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