Swan refuses to rule out income tax hike

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Swan refuses to rule out income tax hike

By chief political correspondent Simon Cullen, ABCUpdated February 14, 2013, 8:57 am

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Federal Treasurer Wayne Swan has refused to rule out increases in income tax as the Government tries to plug a revenue shortfall in its budget.

The Government is coming under pressure to explain how it will pay for key promises, such as the National Disability Insurance Scheme (NDIS) and the overhaul of school funding, given revenue collections have fallen well short of predictions.

Asked repeatedly this morning whether personal income taxes would rise, Mr Swan eventually told ABC Radio National: “I don’t… go into that sort of rule in rule out routine, and I’m not doing it today”.

“What I’ll do is the responsible thing – put in place a strict fiscal policy, make sure that working Australians get a fair go, that there is incentive in the tax system, that we build up their superannuation.

“They’re the sort of things I’ll do, and I’ll leave the speculation for everybody else.”

His comments prompted a swift response from shadow treasurer Joe Hockey, who declared the budget was in “total chaos”.

“They’ve got a mining tax that is hardly raising the revenue that they budgeted for, but they spent [it],” he told reporters in Canberra.

“They’ve now got a carbon tax that is not raising the revenue they budgeted for, but they massively overspent.

“And now, the Government’s refusing to rule out increasing the personal income tax of everyday Australians.”

The Coalition has promised to scrap the mining and carbon taxes, and deliver a personal income tax cut.

Assistant Treasurer David Bradbury says the Government has already delivered $47 billion worth of tax cuts, and he argues the Coalition’s policies would actually put more pressure on family budgets.

“Joe Hockey’s plans – if you unwind the mining tax, you unwind the carbon price – is to unwind the tripling of the tax free threshold,” Mr Bradbury told Sky News.

“He needs to explain what they are going to do in that regard.”

Last week, the Government revealed the mining tax raised just $126 million in its first six months.

In the budget, it was forecast to raise $3 billion during 2012-13, although that was later revised down to $2 billion.
The NDIS is estimated to cost $14 billion annually once it is fully rolled out, and Prime Minister Julia Gillard has previous said it will involve “tough choices” when it comes to the budget.

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