Soybean Stew

Petrol prices and inflation

Opposition Leader Kim Beazley has called for a round of "decent" tax cuts to counter the influence of rising oil prices on Australian families.

In the last round of tax cuts delivered by the Howard Reactionary Forces, the lion's share of benefit went to the top 3-5% of income earners which included massively raising the top rate threshold and scrapping the superannuation surcharge. People earning less than $58K per annum got a measly $6 a week, which has long since been more than wiped out by escalating fuel costs. The vast majority of Australian families are now worse off than they were a year ago. The only people who stand to benefit are oil companies and the tiny minority of very successful businesspeople and "higher professionals" lucky enough to register six- and seven-figure incomes.

Further, this is having a flow-on effect on the wider market. From next week, the cost of milk, to many a nutritional necessity, will rise by 8%. Lucky I'm lactose intolerant! Inflation is already rising, and this in turn will lead to higher interest rates and higher repayments in an era where home affordability is already at an all time low!

Rather than making wholesale tax cuts which will only make the rich get richer and accentuate inequality, the ALP needs to target tax relief to those who need it most - low- and middle-income families and low-wage single workers. This could be achived with targeted relief in the form of means-tested tax deductions or raising the tax-free threshold to say $14,ooo (from $6000). While it will reduce tax for everyone, the greatest percentage of tax burden reduced will go to those who need it most. Any such move could easily be paid for by removing the provision for Family Tax Benefits for millionaires' housewives by introducing a slowly progressive means test.

There should also be further incentive to develop the nation's skeletal public transport network. It's a crying shame that the outer suburbs of Melbourne have next to no public transport, with many localities getting only three or four buses a day on weekdays. A whole lot of votes are there in the marginals for the taking if funding could be provided for a workable, integrated PT system which would enable families to no longer need to waste petrol money on their 25-mile trek to the CBD daily.

posted by Max Soy @ 4:51 AM