A debt levy approved by Cabinet yesterday isn’t a tax because the Government went to the election last year promising to partially fund its paid parental leave scheme with a charge on big business.
That’s how Treasurer Joe Hockey explained the “debt levy” to the Australian Financial Review, as the Government faces increased criticism for breaking its promise not to introduce any new taxes.
“We went to the last election promising to introduce a levy for PPL, so claims that we said we would never introduce new taxes are just wrong,” Hockey told the AFR.
“We actually went to the last election with a written policy saying we were introducing the 1.5 per cent levy for PPL.”
The tax hit on businesses, based on the Coalition’s policy, is only expected to hit the largest 3000 companies in Australia.
The threshold for the Government’s debt tax will begin at between $150,000 and $180,000, and will see Australians earning this, or more, wearing an increase in their taxable income.
Cabinet was not aware of the rate, or final threshold when it approved the measure, according to the report. The levy is designed to bring Australia’s deficit — which according to Bloomberg is the second smallest among developed nations — back to surplus in the coming years.
Hockey expects voters will not react badly to the debt tax, citing speeches made by former treasurers John Howard and Peter Costello, who both introduced unmandated spending cuts and tax increases out of what they described as necessity.
“It won’t dominate headlines the day after the budget but we are asking everyone to contribute to the rebuilding of the budget and the rebuilding of the economy,” he said.
There’s more here.
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