Labor calls on the Government to keep the deficit levy

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Labor says that should the Government lift the temporary deficit levy, it would effectively be handing millionaires a $16,400 annual tax break at the expense of low and middle income earners.

The deficit levy is a two per cent tax on the income of those earning over $180,000 per year. Removing the deficit levy would basically add $16,400 – or $315 per week – to high-income earners.

Opposition finance spokesman Jim Chalmers has called on Malcolm Turnbull to keep the temporary deficit levy instead of freezing the indexation of family payments. The Government intends to freeze family payments so it can pay for its $1.6 billion childcare package.

 “They could have raised three times as much money from a third as many families and only impacted largely the top one per cent of earners in this country,” said Mr Chalmers.

“If that deficit levy was necessary in 2014, when the deficit was only $11 billion, it’s more than necessary now that the deficit is $37 billion.

“They’re going to abolish that deficit levy and it will give a huge tax cut to people at the top end.”

Mr Chalmers also questioned the Government’s plan to create $50 billion worth of corporate tax cuts at the expense of Australian families.

“If they do hang onto them, it will be up to Malcolm Turnbull and Scott Morrison to explain to the Australian people why they should wear cuts to family payments or a tax on Medicare at the same time as the Government gives $50 billion to the big banks and multinationals,” he said.

“You can see why people are turning on this Government.”

Should the Government retain the temporary deficit levy instead of penalising low-income families and, if so, for how long? Until the Federal Budget is back in the black?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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23 Comments

Total Comments: 23
  1. 0
    0

    WE SHOULD NOT RETAIN THIS CORRUPTED AND DELIBERATELY BIAS BUNCH OF PARTY PUPPETS NOR THEIR BILLIONAIRE MUSLIN KISSING & HUGGING CORRUPT LEADER !!!!

    • 0
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      Hoo-Yay! (it’s not -hoo-ah as you see in the movies… I won’t explain the genesis of it…. oh hell – it refers to the response of a red-blooded male to a fine piece… OK…. Hooo -YAY!)…

  2. 0
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    Tax breaks to very wealthy Australians and the business sector only boost their savings but keeps our economic growth lower. This government needs to realise that the poor and middle class keep this country running not just with their taxes. They don’t hoard money off shore or in various tax avoidance investments and savings. Their spending creates jobs and contributes to economic growth.

    • 0
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      Dead right Jackie. Age pensioners on the full rate spend ALL of it and make a huge contribution to the economy as most of what they spend it on attracts the GST.
      Whereas we have been told that around 55% of part pensioners don’t even spend it and leave most of it in the bank???
      Yet, we give the highest paid income earners a massive tax reduction so they can spend more on overseas trips or, worse, negatively gear more properties, leave it in the bank or add to their huge superannuation funds.
      It’s not complicated Malcolm.

    • 0
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      It is not a tax break or reduction. It was a temporary levy which will expire soon. Those that have been unfortunate enough to have been paying this extra tax have done their bit, so leave them alone.

    • 0
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      Great argument for cutting out the opportunity to “hoard money off shore or in various tax avoidance investments and savings.”.

      When do we start?

  3. 0
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    Big business have ways of manipulating their income & transferring wealth to their other Companies, set up for the purpose of operational activities OFF SHORE. Thus maybe paying around 2 to 5% of their overall earnings in tax. Working class haven’t got a say in what tax they pay. THEY WANT TO GIVE THEM TAX CONCESSIONS. WHAT A JOKE!

    • 0
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      Jackie, Grateful and Boof – you are all spot on.
      The LNP have tricked people into believing the “Trickle down” bullshit. People on low incomes spend all there money just trying to exist, so all their money stimulates demand and boosts the economy. I call it “Trickle up economics”.
      As you people said, the very rich take money OUT of the system (reducing demand) into offshore tax havens. Our Prime Minister was caught out doing just that, but it is what all rich people do. Not to do it is for losers, they reckon. It proves that the rich are the biggest LEANERS, because they don’t contribute to building infrastructure and government coffers like the rest of us taxpayers do.
      And then to give them billion dollar tax breaks, when the rest of us are doing it hard, is simply heartbreaking. What do you think the Banks will do with that money – employ more bank tellers? No, it will mainly go to overseas investors and shareholders, which means it will leak out of Australia. It’s no wonder the Australian economy and wages are stagnant.

  4. 0
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    The deficit levy is not “at the expense of low and middle income earners.” Removing the levy will not mean anyone else is worse off. Just means our current deficit will likely be higher.

    A large proportion of the budget is targeted at low and middle income earners, through welfare payments, health care, family benefits. Half of the population now pay no Nett tax. The reality is they are relying on the efforts of others to maintain their lifestyle.

    Somebody is paying for all those benefits and at the moment it is the much maligned high income earners and business. Sure some businesses and high income earners manage their affairs to pay as little tax as they can, nothing illegal or particularly immoral about that. Nobody should pay more than they have too. The tax laws have been around for decades, both the left and the right of government have had opportunities to do something about this but nothing substantive ever happens. When one suggests something the other side will cry foul and say its unreasonable and unfair.

    We as a country have to face the hard reality that we are living beyond our means. If we want a generous welfare system then we have to decide to give something else up. You can’t hope continue to fund the budget by simply applying more tax on those who are the only Nett taxpayers now. You simply tax them out of existence. Business will move to more friendly tax countries and high income earners decide its not worth working any longer. We end up with less and less taxpayers and ever more people dependent on benefits.

    Government has been of low quality for the past decade. Decisions made without any funding all left for future generations to solve. More recent times too many Senators with their own agenda has paralyzed government, and a left and right that just wants to find fault with the other. As a country we have gone backwards over the past decade.

    Its always easy to blame someone else but we have to start looking a little closer to home. We vote for those in government we get what we deserve. Until we realize that everyone has to contribute, whether that is a sacrifice of some benefit or more stringent tax regime, nothing will be fixed if half the population just expects the other half to do all the hard lifting. We all have to be going in the same direction.

    If we don’t as a community recognize this then we will still be having these same arguments in another 10 years time.

    • 0
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      You are right of course Phil. And the trouble with welfare benefits is that once given, people are very reluctant to give them up even when the sole reason for the payment no longer exists. Consider the Carbon Tax supplement, the carbon tax was repealed and yet the recipients of the supplement somehow think they are still ‘entitled’ to it. The same people see no problem with hitting up the so called ‘wealthy’ for more and more for no other reason than they are ‘wealthy’. I too wonder what will happen when this ‘wealthy’ cohort get fed up with other people’s hands in their pockets all the time and decide to go elsewhere.

    • 0
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      Congratulations Phil for soldiering on with these discussions. The ideas put forward by the author of this article are simply so illogical and self serving that I have given up. Exactly how can politicians go on justifying creating levies for a specified purpose and stated duration and then simply continue them forever for tenuous related purposes. The same applies to dubious welfare payments as KSS has discussed. Many of the younger professionals I know have packed up and left for SE Asia, UK and US.

    • 0
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      Bullshit, Phil – the overall tax recoupment is 100% from the masses of lower income people…. Every cent they earn goes almost immediately back into the tax cycle, so on a person-to-person basis, they actually contribute much more.

    • 0
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      Teddy, you actually believe that those with the opportunity to pay a very low percentage of tax while garnering a heap are paying their full burden and are not Leaners?

      The dollar amount of tax paid is irrelevant in the sense of how much an individual pays v personal income and what the left over can BUY – it is the amount paid by those who have no choice and no other opportunities to NOT pay tax, and the small amount v income that those with those opportunities actually pay.

      Someone said the latter pay around 15%^…

  5. 0
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    I’m talking about the very wealthy who pay hardly any tax. How would that bebefit anyone living in Oz. Especially when these companies put their wealth in oversea’s “Banks” & investments, not connected to Australia. If the Govt., could force each Co. Which earns, say, over a $billion , to pay 30% of what they earn in Oz & add 8% for each $billion, after that up to say, $7billion, it would put a few ‘bob’, in the system. Leave at that for any $billions earn’t after that. H’m. Tell me what is wrong with that?

    • 0
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      You are discussing what I raised above – a minimum mandated tax…. that 30% company tax on profits alone after all deductions (a very slippery issue) was more than reasonable, compared to the equivalent income tax paid for individuals.

      When you consider that most corporations operating in this nation have an offshore tax haven base, and are not based here and do not pay their way with incomes to locals for ‘management’ etc above the ‘lower management’ level, and thus only allow the opportunity to pay income tax on those outlays plus their floor staff … and they then declare a repayment to an offshore governing body as a deduction on their tax burden here, and THEN declare that repayment as a deduction in their tax haven as well…..

      Well… it’s easy to see without looking too far that not much is really sacred….

  6. 0
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    Labor says .That says it all

  7. 0
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    THE LIBERAL PARTY IS A MILLIONAIRES PARTY AND IF YOU VOTE THAT WAY WHAT ELSE DO YOU EXPECT. A TAX BREAK FOR BIG BUISNESS, THEY DO NOT PAY TAX.PHIL SOUNDS LIKE YOU HAVE ALSO GOT YOUR SNOUT IN THE TROUGH.

  8. 0
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    The temporary levy was introduced as a direct result of the horrendous deficit left by Labor. Well at least they (Labor)are admitting such by pressuring the Government to extend the levy for so-called high income earners.

  9. 0
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    It’s not hard to understand why thinking people are losing confidence in our politicians.
    To suggest that a temporary deficit levy become a “permanent temporary deficit levy” is not simply ludicrous, it also shows a lack of leadership.
    The levy should have been dropped when Abbott was removed.
    Labor have not learned any lessons from being in opposition. They are a ragtag bunch of incompetent ex union bosses who are hell bent on disruption and transitioning to communism.

    • 0
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      Happens all the time, Frank – but mostly when it’s directed at the peasants, who are deemed to have the burden of ‘carrying their load’ instead of being ‘leaners’….

      You’ll get there, Grasshopper…..

  10. 0
    0

    We need a minimum tax level vis income overall, as applies in the United States.

    You can’t seriously say that someone would carry on a business that constantly loses money and returns nothing to the owner/shareholder. At some time that has to stop.


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