Labor in favor of simultaneous tax cuts and negative gearing policies


Australia’s major political parties enter next election in favor of third-stage tax cuts

On Monday, the Australian federal opposition decided to abandon its previous stance and offer the policy the same statutory tax cuts as the coalition after a six-year opposition or two election cycles.

“Shadow Cabinet and Caucus today confirmed that government workers support the revision of the personal income tax legislation and maintain the existing system of negative gearing and capital gains tax,” said Anthony Alba, the leader of the Labor Party. Neese and Shadow Finance Secretary Jim Charmers said. Joint statement on Monday.

Albanese said the move provided “certainty and clarity” to more than 9 million working Australians.

In short, Labor is now supporting Stage 3 tax cuts, abolishing the 37% tax rate and flattening the tax rate for everyone with incomes of $ 45,000 to $ 200,000 to 30%. People who earn more than $ 200,000 remain in the 45 percent tax range.

The move is against the backdrop of strong divisions within the party regarding support for policy. Earlier, Labor criticized the bill violently, arguing that it favored the wealthy and caused greater inequality.

“The third stage is the least responsible, affordable, unfair and unlikely to be effective, because high-income earners are more likely to spend on the economy the more modest means of workers. Because it ’s not very good. ” Chalmers said October 2020.

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Shadow Treasury Jim Chalmers at the Doorway at the Parliament Building in Canberra, Australia, May 11, 2021. (Sam Mooy / Getty Images)

But he said the party has “listened and learned” since the last election.

“I said I wouldn’t adopt the same set of policies that I did in the last election in the next election.” Chalmers told ABC Radio on Monday. “People want us to look forward to, rather than trying to prosecute a battle from the past.”

In addition to the third phase of tax cuts, Labor has abandoned the proposal to remove all existing real estate negative gearing aimed at improving affordability of homes. Similarly, plans to reduce capital gains concessions from 50% to 25% have been abandoned.

Split response

The housing industry welcomed the change in approach and congratulated the party on “seeing the senses” ahead of the next election.

“The opposition’s previous position on negative gearing and capital gains taxes has always been the wrong policy, the wrong time, and voters in the two elections knew it.

“The majority of real estate investors are not wealthy real estate barons. They are Australians every day and are trying to provide the rental housing that one-third of the households renting need,” said the Australian Real Estate Council. CEO Ken Morrison said..

Treasury Minister Simon Birmingham has criticized the move as the “most half-hearted concession” ever made in Australian politics and incredible.

“They did it after months and years of quarreling and debating within Labor.” Birmingham told reporters.. “We know they are separated. We know they don’t believe it, and they can’t trust it.”

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Opposition leader Anthony Albanese and Shadow Treasury Jim Chalmers arrived at the Capitol in Canberra, Australia on May 12, 2021 for a morning television interview. (Sam Mooy / Getty Images)

Liberal Senator Andrew Bragg of New South Wales called the change a “huge internal defeat” for Chalmers. In the post On Twitter.

The Greens have blown up the Labor Party for “surrendering” to Prime Minister Scott Morrison’s request, claiming that policy exacerbates national inequality.

“These are tax cuts for those who don’t need them the most.” Greens said.. “We can’t afford it. No need. This money should be used to create a better society.”

Matt Gourdnov, senior economist at the Australian Institute, said Australia already has lower tax rates than other OECD countries and agreed with the Greens’ position.

“Australia’s inequality is worsening, so we need debate and better policies on how to properly increase wealth and reduce inequality.” Gourdnov said The Canberra Times.