Tuesday, 29 April 2014
Apparently Australian Prime Minister Tony Abbott waxed lyrical about his plans to reduce his budget deficit when he attended a Sydney Institute dinner on 28 April 2014.
Amongst other measures it seems he is to introduce a deficit tax until the federal deficit disappears.
This is what News Corp's The Australian had to say on 29 April 2014:
The new debt tax will only apply to workers on incomes of $80,000 and above and the rates will increase in line with tax brackets.
Under the new levy, a taxpayer on:
$80,000 will pay an extra $800 a year ($15 a week).
Bearing in mind that on 14 April 2014 Treasury apparently already expected average full-time employees to be paying tax of 39¢ in the dollar by 2015-16 and, even taking into consideration the introduction of this deficit tax reportedly worth an estimated $3.6 billion in total, the Abbott Government's Mid-year Economic and Fiscal Outlook 2013‑14 indicates that the federal deficit is still likely to last until 2023-24.
As by that financial year total federal government payments are projected to be 26.50% of Gross Domestic Product (GDP), federal government total receipts are projected at 26% of GDP, public net debt is projected to rise to 14.3% of GDP and, given the billions in additional borrowings still being undertaken by the Abbott Government and the fact that in April 2014 an additional $14 billion has been committed to the Australian air force in addition to the non-budgeted est. $20 million plus spent by Defence over the last 41 days on the search for a missing commercial aircraft, the annual budget will possibly still be in deficit then.
One has to wonder how the 5.8 million Australians, who despite the warning signs voted for Coalition candidates at the 2013 federal election, felt when they woke this morning to find so many of them liable for a new tax.