Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Costello tries to dress tax system mutton as family friendly lamb.



Download PDFDownload PDF

Wayne Swan MP Federal Labor Shadow Treasurer

30 March 2006

COSTELLO TRIES TO DRESS TAX SYSTEM MUTTON AS FAMILY FRIENDLY LAMB

By manipulating the numbers about Australia’s tax system in yesterday’s OECD Taxing Wages report, Peter Costello is attempting to dress up tax system mutton as family friendly lamb.

The simple fact is the yesterday’s report painted a very sorry picture of Australia’s unwieldy tax system.

In Question Time today the Treasurer claimed the report showed that the Australian tax system was at the ‘top of the ladder.’

Unfortunately for the Treasurer the experts agree: Australia has a dysfunctional tax system with some of the worst tax grabs in the world.

The Australian Financial Review editorialised that the OECD report contained ‘more evidence that the Australian tax system is a dysfunctional accident of design.’

In the table he released today the Treasurer claims to summarise ‘the reduction in the tax wedge for eight different family groups.’

But the Treasurer compared the latest figures with the tax rates in 1999-2000 - before the introduction of the GST, and at a time when the tax burden was historically high after four years of Howard Government inaction on tax.

The tax cuts of 2000 took our tax levels back to historical levels. Using the figures for 2000-01 shows that for 7 out of the 8 family groups the Treasurer referred, the tax burden has grown over the last four years.

What the ‘real tax burden’ table below shows is that Australian families are living under the highest taxing government in Australian history.

Yet again the Treasurer has attempted to use slimy numbers to hide his own failure to reform Australia’s ‘dysfunctional’ tax system.

See the ‘real tax burden’ table on following page

Thur 30 March 06

Contact : Lachlan Harris 0417 592 338

Table 1: The REAL Tax Burden: Income tax plus employee contributions less cash benefits as a % of gross wage earnings

Fiscal Year for Australia: 2000-2001 2004-2005

OECD Year: 2001 2005

Family type and wage level

Single person without children at 67% of average earnings 18.4 20.3

Single person without children at 100% of average earnings 22.7 24.0

Single person without children at 167% of average earnings 30.2 31.7

Single parent with two children at 67% of average earnings -13.9 -11.8

One-earner married couple with two children at 100% of average earnings

13.2 10.9

Two-earner married couple, one at 100% of average earnings and the other at 33%, with two children

15.6 15.7

Two-earner married couple, one at 100% of average earnings and the other at 67%, with two children

18.2 18.5

Two-earner married couple, one at 100% of average earnings and the other at 33%, with no children

19.2 20.8

Source: OECD Taxing Wages 2004-05 Part III tables 1c to 8c

ENDS Thur 30 March 06 Contact : Lachlan Harris 0417 592 338