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Cutting petrol tax takes pressure off inflation and interest rates.



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MEDIA RELEASE SF/131 Thursday May 3, 2007

CUTTING PETROL TAX TAKES PRESSURE OFF INFLATION AND INTEREST RATES

THE Federal Government has cash to splash in the Budget but economists warn that big tax cuts could fuel inflation and higher interest rates.

That would be a nightmare for Australian families already struggling to makes ends meet and battling soaring petrol prices and grocery costs. Food prices are increasing at 4.6 per cent which is double the inflation rate. This Budget must be focused on helping families and small businesses.

One of the best ways the Government can help families and small businesses is to take action to avoid any more interest rate hikes. That is why FAMILY FIRST's plan to cut petrol tax makes sense.

Cutting petrol tax takes pressure off inflation because it puts downward pressure on transport costs which puts downward pressure on groceries and services. High petrol prices are hurting Australian families and small businesses which is why FAMILY FIRST has been calling on the Government to cut petrol tax by 10 cents a litre, which would cost $3.8 billion.

Petrol prices are currently about $1.35 a litre in capital cities and more than $1.30 in regional areas. The Government insults families and small businesses by claiming it feels their petrol pain, but can do nothing about it. That is rubbish. The truth is the Government is drunk on petrol tax.

To ensure the Budget puts families first, FAMILY FIRST also wants:  Lifting the tax free threshold for all taxpayers from $6000 to $8000 this year, rising to $13,000 (equivalent to subsistence income) in future years. The increase to $8000 would cost $2.9 billion;

 A further $1000 increase in the tax free threshold for each dependent child, which would cost approximately $1.7 billion.

Media enquiries phone Chief of Staff Felicity Dargan on 0409 550 446