Here's One Huge Problem With Tony Abbott's Plan For A 'Deficit Levy'

The government is expected to attach its deficit tax to a budget supply Bill (Photo: Getty)

There’s one huge problem with the Government’s plan to slug high-income earners with a deficit tax.

It might not get through the Upper House.

Lenore Taylor at The Guardian Australia has spoken to the clerk of the Senate Rosemary Laing, who explained the problem the Abbott Government faces.

A “deficit levy” would never pass if it were put to the house as a stand alone Bill. Labor, the Greens and Clive Palmer are all against it.

It is expected they will attach the levy to an appropriation or supply Bill after the budget is released, since these are almost always approved.

“The constitution says you can’t tack extra things on to those bills, and it says a bill imposing taxation can only deal with that tax … the Senate has always taken the view that whether it is a new tax or a rise in an existing tax it should be subject to those rules and be presented as separate legislation,” Laing told The Guardian.

“Taxation and appropriation have always been considered separately … if taxation was included in an appropriation bill the Senate could try to amend the bill to separate the tax measure or it could express the view that the tax measure should not be in there and a majority in the Senate could vote to prevent the appropriations bill from being debated until it was taken out and presented separately,” she said.

Reports this morning said the levy had been approved by Cabinet. The threshold is expected to begin at incomes between $150,000 and $180,000, though this has not been confirmed.

This is one of several expected measures designed to bring Australia’s deficit — one of the smallest in the developed world — back to surplus. The levy means high-income earners can shoulder some of the burden, along with average income earners who could suffer from welfare spending cuts.

There’s more here.

Now read: This Is Joe Hockey’s Logic For Why The ‘Debt Levy’ Isn’t Breaking A Promise On Taxes

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