"Howard's high earners to face cuts"
- Michelle Grattan The Age 6/5/2008
"AUSTRALIA'S top earners nearly doubled their
income during the Howard government years, new figures
have revealed, providing ammunition to Treasurer Wayne
Swan as he prepares to slug the rich in the federal budget."
Under Howard the economic elites consistently benefited most
from tory income re-distribution, the anti-Robin Hoods who
took from the poor to pay the rich.
For example the Greedy Selfish Tax (GST) falls heaviest on
the poor, who pay as much tax on toilet paper and other
necessities as Jamie Packer does, and yet the top 20% of
income earners received 50% of the Income tax "compensation".
The remaining 50 was shared among the 80% or ordinary Australians!
8^o
Now a treasury analysis proves what many of us have known all along,
Howard policy, especially tax cuts, favoured the economic elite,
which means the rest of us had to pay more;
"An analysis prepared by Treasury shows that families with
an earner in the top 3% of taxpayers have enjoyed an 85% increase
in their disposable incomes since 1996 — about 1.7 times the
rise for families with an average income earner."
They happily float over the top of inflation and interest rate
rises, while you drown in them.
Howard's legacy is a decade of class war and division where the
workers were attacked by Work choices and the economic elites
luxuriated in non-means tested welfare and tax handouts.
"The top 3% have also seen their average rate of tax fall by 6.2
percentage points in that period, almost twice the 3.3 percentage point
reduction for someone on average earnings."
WHAT HAPPENED TO THE FAIR GO FOR ALL? UNDER HOWARD IT WAS IGNORED
AND REPLACED BY THE RULE OF THE ROBBER BARONS!
The analysis, prepared at the Government's request and obtained by The
Age, could be used by Mr Swan next week to defend a squeeze on the rich
in a budget designed to tackle inflation with big spending cuts.
The Government has promised that, despite its cuts, it will protect
"working families". Mr Swan has spoken of a working family in Sydney
having a principal earner on $50,000 to $60,000 with a secondary earner
on $20,000 to $30,000.
The analysis comes as the national secretary of the Australian Workers
Union, Paul Howes, has called for the means testing of the baby bonus
and a general review of other forms of "welfare for the rich", including
the first home buyers grant. "There is a good case for people who don't
need these subsidies losing them," he told The Age.
Speculation has been growing that the Government will use next week's
budget to impose a means test on the baby bonus, which is currently
$4133 and due to rise to $5000 on July 1.
Treasury's analysis — combining the effects of income growth, tax cuts
and government benefits — shows very high earners have done extremely
well since 1996-97.
The value of ***ulative tax cuts for top earners since 1996 is $14,402 a
year. In addition, the real value of typical transfer payments — cash
through Centrelink, the Family Assistance Office or the Taxation Office
— available to them has doubled, from $2325 to $4629 a year.
And average transfers "in kind" to those in the top 20% of earners rose
by 33%, compared with 27% for all households. "In kind" benefits include
non-cash benefits and services for education, health, housing, social
security and welfare.
Mr Howes, who earlier this year urged that half the tax cuts be put into
superannuation, said he recognised this would not happen this year, but
it should be done in next year's budget. There should also be immediate
provision for people to voluntarily divert their tax cuts into
superannuation.
Referring to the lack of a means test on the $7000 first home buyers'
grant, Mr Howes said a low-income young couple buying a $300,000 house
in a poor suburb was in a completely different position from a rich
young couple buying in Toorak.
"I'd rather see millionaires not receiving the baby bonus than money cut
out of some other programs. Welfare for the rich should be cut in favour
of more spending on infrastructure and training."
Mr Howes said the Government had a "good mandate" for an assault on
welfare for high earners — including some members of his union.
He said about a quarter of Australian Workers Union members would earn
more than $120,000 a year, and these people did not need as much welfare
as people on less than $40,000.
"It doesn't make sense that the richest man in the country having a baby
should be eligible for the same amount as the poorest man — or indeed be
eligible for any baby bonus at all."
Mr Howes said he had received the baby bonus for two children, and that
it had been a welcome benefit. "But did I need it? No," he said.
The Government has already said it will means test Family Tax Benefit B
— for stay-at-home mothers — for families with an income of more than
$250,000.
But a range of other benefits are not means tested, including the child
care tax rebate, the child care benefit and the dependent spouse tax
offset.
The ground has been further prepared for a budget to fight what Mr Swan
yesterday called the "cancer" of inflation with the revelation of a
Treasury minute showing the Howard government was warned in November
2006 — before the senior ministers' meeting that set budget priorities —
that big spending would boost inflation.
The minute, obtained by the Nine network under freedom of information
laws, said that "as the economy is running close to capacity there is a
real risk that significant spending will add to inflationary pressures""
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Mission Accomplished
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