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Wednesday, June 19, 2019

Albanese: Take a Stand on Tax for our Supporters' Sakes

above:  Anthony Albanese must take a stand for Labor Constituents, opposing effectively flatter and lower tax which would end up with austerity and inequality down the track...

A letter to Anthony Albanese:

Albo! : Don't pass phases 2 and 3 of the Tory Tax Plan

Abbott blocked good policy ; Now Labor has a right to block sweeping tax cuts that will indirectly hurt millions of its constituents. And many will be very disillusioned or angry if you let phases 2 and 3 pass.

The Government's plans include the following for phases two and three:  (from Treasury)

"For 2022–23 and 2023–24, the top threshold of
the 19% tax bracket will increase from $37,000 to $41,000
the 32.5% bracket will increase from $90,000 to $120,000.

For 2024–25 income year onwards, the top threshold of the 32.5% tax bracket will increase from $120,000 to $200,000."

This represents an effective 'flattening' of the tax scales ; with higher income individuals on effectively lower rates of tax.

It will also cost the Budget $160 billion over 10 years. This when we're likely heading for a recession. It will fuel austerity.  Especially if the government prioritises the surplus even in time of economic downturn.

Finally: remember that the median wage in Australia is only approx $53,000/year. The Conservatives talk about people on $120,000/year as if they're 'battlers'. If we don't stand up and fight only the Conservatives will eventually win with their long term agenda of a flat income tax.

They also want to legislate ahead for the next term of government which is totally unreasonable.

The Conservatives claim a mandate. Yet they won through a fear campaign based on lies ; Clive Palmer's Money ; and preferences from Palmer and One Nation.  And in Opposition under Abbott they never respected Labor’s mandate.

Labor needs to restructure income tax for fairness ; and index the lower brackets to avoid a vicious cycle of bracket creep and regressive tax cuts which flatten the scales.  This must be a priority for Labor upon re-election.

We don't need to capitulate on progressive policy. Labor needs a strategy to nullify the fear and disinformation campaigns.  Capitulation is not a strategy.

Raise progressive taxes by somewhere in the vicinity of 1% to 1.5% of GDP upon retaking government. Exclude lower and middle income earners from higher taxes. Be thorough in this. Point out the moderate scale of the reform ; and explain where the money is going. (eg: Aged Care Social Insurance, Medicare Dental)  If Labor must tax a broader base then consider the Medicare Levy as well. It’s the closest thing in this country to “a popular tax” because of the clear connection with medical services, and the universal coverage most Australians value.

The Coalition is fond of arguing about "great big new  taxes" - even where there are no new taxes; Labor HAS to fight them on this.  Again: Insist on a figure in the vicinity of 1% to 1.5% of GDP in the first term of a new Labor Government.  Point to our low tax rates in Australia compared with the OECD average.    (approx. 27% of GDP compared with approx. 34% of GDP)  Australian tax overall is approximately seven percentage points lower in Australia compared with the OECD average.  That’s a difference of approximately $119 billion Australian dollars a year.

If we give in we get an Americanisation of the discourse which gradually flattens tax scales, and makes meaningful social democratic reform on social wage, social insurance, public infrastructure and welfare impossible.

Take a stand, Albo.  That’s what ordinary Labor members and voters want and expect from you.

Dr Tristan Ewins  (Labor member of over 25 years)


  1. Tristan, I tend to agree in part with your comments.
    The just elected parliament should not try to bind future parliaments.
    We face a climate emergency where significant infrastructure expense is warranted trying to remedy said emergency.
    The climate emergency may require spare savings in the community to be requisitioned into climate change war bonds, as all must contribute to emergency climate change remediation efforts, especially the rich. Abandoning the future to unfettered laissez faire will not address the climate crisis, rather it will guarantee hundreds of thousands dead to heat stroke in 55 degree summer days.

    Andrew Oliver

  2. What Labor and the unions do not do, for fear of undermining the national unity of classes their leaderships and members largely support, is point out how the wealth the workers are employed to produce grows every year. Output per hour of labour, aka productivity, increases reducing the time necessary to produce more and more wealth. There is no fixed pie to draw on to fund the social wage. The pie grows all the time and so should the social wage. Meanwhile, the Coalition and their micro-party allies are all for cutting taxes thus, cutting the budgetary pie. The question is, taxes for whom, for which class? The class of employers, landlords and finance capitalists or the bottom 90%, the working class?

    A quick check of Google can reveal that most tax is paid by the upper 10% and the companies they own so the prospect of cutting taxes means that the upper 10% and the companies they own will benefit most from such cuts. Labor could win many, many more votes, if it just addressed the tax question from a class point of view. Cutting taxes for the bottom 90% could be accomplished by (for instance) raising the no tax threshold from $18,200 to $60,000 and by abolishing the GST i.e. the giant sales tax. All sales taxes are regressive i.e. they end up shifting the burden of funding government from the upper 10% and the companies they own, to the working class.

    How could government be funded properly to provide adequate amounts of revenue for public health, education and the age pension?

    It seems obvious to me: by increasing progressive taxes on the upper 10% and restoring the company tax to where it sat in 1987, 49%. But, this will not be seen as realistic by a citizenry who are schooled to think of themselves as being "taxpayers" and "consumers", as opposed to the producers of the wealth contained in the Australian GDP. This citizenry comprises the membership of all the parties on the ballot and the still existing membership of the fast fading, "fair day's wage for a fair day's work" union movement.

  3. It's really not clear what's happening on tax in this country. Some say Albanese is passing all of parts 1 & 2 of the Government’s tax package ; even if not part 3- ‘which alone would have come at a cost of $95 billion in five years’.
    But not all of part 2 is acceptable either ; It includes the following (from Treasury):

    "the 32.5% bracket will increase from $90,000 to $120,000."

    That will cost almost $4 billion a year.

    Now the Median wage (ie: middle income) is only approximately $53,000 a year.
    Though If you ONLY take FULL TIME wages that equates to $65,577 a year.
    But this is NOWHERE NEAR $120,000 – which is well within the top 10 per cent.
    If people on undoubtedly high incomes do not pay their fair share of tax how will the social wage survive - let alone expand?
    If the ALP does not stand for the social wage what does it stand for?
    And when the Recession hits - and the austerity begins in earnest - just remember - if these tax cuts pass we in the ALP will have helped prepare the way.