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More evidence against government tax cuts



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CHRIS BOWEN MP

SHADOW TREASURER

ACTING SHADOW MINISTER FOR SMALL BUSINESS AND

FINANCIAL SERVICES

MEMBER FOR MCMAHON

MORE EVIDENCE AGAINST GOVERNMENT TAX CUTS

The Turnbull Government’s plan to lock in more than $200 billion of tax cuts

over the medium term has been upended today by one of the most respected

global institutions, the Bank of International Settlements (BIS).

In its Annual Report, the BIS has warned against the “continuous build-up of

debt” and that governments should “rebuild policy buffers” now to be well

placed to tackle the next downturn.

The BIS also gave Australia a specific mention, pointing out that while some

countries like the United Kingdom and the United States “have seen some

private sector deleveraging” leaving them less vulnerable, “household credit as

a ratio to GDP remains at historical highs in Australia” [page 13].

This follows recent advice from the International Monetary Fund (IMF) that also

recommends governments rebuild fiscal buffers in to create room to

provide fiscal support in an eventual downturn.

At a time when some of the most globally respected organisations like the BIS

and the IMF are arguing forcefully about the need to re-build fiscal buffers

during the global upswing, the Government is doing the exact opposite.

Instead of taking advantage of the better international economic conditions, and

putting in place a better plan to pay down debt, the Government is hijacking the

budget with more than $200 billion in new tax cuts that leave Australia less able

to respond to a global downturn if one eventuates.

The calls from the BIS follow comments from the Grattan Institute which in

relation to the tax cuts has said “we do not think it is prudent to be providing tax

cuts of this magnitude that far in the future” and that as a result the budget “will

inherently have less flexibility in a significant downturn”.

This is exactly why Labor does not support the hugely expensive tax cuts on

the never never which together with the government’s fiscally reckless

company tax cut will blow a $25 billion annual hole in the budget, something

that will put jobs and future services at risk.

Labor is the only party heeding the advice and making the tough decisions on

the budget.

MONDAY, 25 JUNE 2018

MEDIA CONTACT - JAMES CULLEN 0409 719 879

Authorised by Noah Carroll, ALP, Canberra.