Treasurer Joe Hockey to target tax creep

    The Australian
    January 20, 2015



Joe Hockey has ruled out any backdown on government plans to deregulate university fees and foreshadowed further “fair” welfare reforms to help stop ordinary Australian taxpayers “working for the first six months of the year for the government”.      

Returning from his Christmas break optimistic about the economy, the Treasurer has declared 2015 “the year of jobs and families for the commonwealth government”, and signalled a new political approach to the debate about budget repair focused on intergenerational fairness and cost of living pressures.

“It’s going to be a great year for Australia, it’s going to be a positive year for the economy,” Mr ­Hockey said, noting the surprise jump in jobs in the lead up to Christmas that saw the unemployment rate fall to a five-month low of 6.1 per cent.

“I want to give families a bit of a break with cost of living. That’s certainly Tony Abbott’s view. There is a very strong wish to put more money into the pockets of Australians.

“Over the next few weeks and months we’re going to be discussing with the Australian people how we prepare for our future as a nation and as individuals,” he said, pointing to the release of the government’s forthcoming inter-generation report, which will catalogue the impact on the ­budget of Australia’s ageing ­population.

Mr Hockey dismissed as “gossip’’ recent reports the cabinet had been divided over last week’s ­embarrassing decision to dump a planned $20 cut to subsidies for short GP consolations, which ­absent alternative measures has cost the budget $1.35 billion over four years.

“Sometimes it is better to ­reverse a position than to continue with a position that is going to have bad ramifications,” Mr Hockey said, reiterating the ­importance of co-payments, especially for high-income earners, for Medicare reform.

In his first major interview of the year, with Neil Mitchell on Melbourne’s 3AW, the Treasurer ruled out increases in the Medicare levy, changes to superannuation and negative gearing, but he dealt with outgoing former Treasury secretary Martin Parkinson’s repeated warning that middle- ­income earners would soon be paying a 39 per cent marginal tax rate (which cuts in from $80,000).

“Bracket creep is going to put middle-income Australians into the second highest tax bracket over the next few years, which is a disincentive for people to work, and at the same time we’ve got to recognise that there is a lot of competition for corporate investment,” he said.

“We need to be mindful of the competition because human ­beings are mobile and we don’t want a gradual outflow of Australians to work overseas because of the lower tax rate,” he added, ­arguing the GST rate of 10 per cent combined with a 39 per cent tax rate would mean ordinary ­taxpayers would be working in ­effect for half the year for the ­government.

The Treasurer stopped short of any specific tax relief promises, noting a global slump in the price of petrol had been a welcome stimulus for households and tax cuts legislated alongside the carbon tax were due to take effect this year, and reiterated his opposition to GST changes without agreement from state governments.

He signalled a further round of welfare reforms with an emphasis on more stringent means-testing: “It is better to help those most vulnerable with more than to just have a wide net where there are a huge number of people who get less,” he said. Using the example of his ­recently injured son whose broken foot required X-rays, Mr Hockey said it was “inherently wrong” that he as a high-income earner was unable to make a contribution greater than $40 for a waterproof cast.

“I should be making a contribution,” he said.

The intergenerational report will focus on the federal government’s fiscal position over the next 40 years and is expected to project scenarios with and without ­reform.

“They fact that we are living longer is great news. It is kind of remarkable that somewhere in the world today, it is highly probable, a child has been born who will live to be 150,” Mr Hockey said.

That observation drew sharp criticisms from Labor.

“This proposition to justify his 2014 budget, based on a not yet born baby’s 150th birthday in a century and a half’s time, just shows that I suspect our Treasurer’s simply lost the plot,” said Bill Shorten.

“If you want to have serious policies about growing old in Australia, you don’t freeze superannuation at 9.5 cent,” the Opposition Leader added.   

“You certainly don’t make less well-off Australians pay more tax in their superannuation. You don’t cut pensions.’’   

The Treasurer also urged Victoria’s new Premier, Dan Andrews, to change his mind and support the East-West link in Melbourne, which he said would generate up to 7000 jobs.

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I have no problem with legislation which charges politicians more for medical treatment, go right ahead Joe.

By the way high income earners already do not get the private health insurance rebate - that is they pay 30% more for their Medicare  + the 2% levy is on a higher wage + private insurance and there is little if any change from $10,000. Plus $40 for his cast and in my case + $65 for every GP visit.


https://www.ato.gov.au/Individuals/Medicare-levy/In-detail/Medicare-levy-surchar...

Problem with the co payment is that it gets all the people who can least afford the cost as well as those who can.

When we look at how much we are paying for medical maybe it is time to check how much of it is being wasted by the fat cats in the system.

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Treasurer Joe Hockey is the Tax Creep !

Hokey must have been on some good drugs when he made that speech! Working on his second Budget when his first isn’t completed.