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Australian Economic Reform


In the course of last year’s Australian Federal election campaign, the Australian Labor Party (ALP) and the conservative parties – including the ‘Liberal’ and ‘National’ parties – sought continuously to match each other, especially in the field of taxation. The announcement of tax cuts amounting to approximately $AUS 34 billion by the conservatives – all but matched by Labor – cast a regrettably long shadow over proceedings. To get this in perspective, the Australian economy is worth somewhere in the vicinity of $AUS 1 trillion GDP annually.

 

Labor’s ‘shadowing’ of the Coalition, flattening the overall PAYG income tax scale, provides for little in the way of progressive redistribution. New ALP Prime Minister Kevin Rudd has promised to keep almost all of the Coalition’s $AUS 34 billion in tax cut commitments, while deferring $AUS 3 billion for those on over $AUS 180,000/year. He has also committed Labor to ‘simplifying’ the PAYG tax system from four brackets to only three. http://www.smh.com.au/news/economy/rudd-outlines-tax-vision/2007/10/19/1192301012405.html

 

So significant were the cuts, there was little scope to expand the social wage, or promote progressive policy innovations in health, aged care, welfare, and education.

 

Labor’s failure to differentiate itself significantly enough from the Coalition was disappointing and underwhelming. To some extent Labor ‘hemmed itself in’ during the campaign, committing itself to a substantial surplus and promoting a mere

$AUS 3 billion in budget savings with which to fund its promises. Since then, the new Labor Federal government has committed to further budget cuts in order to fuel a larger surplus and ‘rein in’ inflation. Again – it must be remembered that the overall economy has now climbed to a value of over $1 trillion dollars. 

 

The following survey of options is an attempt to sketch

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