The big challenge: the fairest way to spread the Budget pain
Suddenly this week, the pre-Budget debate has turned from being all about changes to the Age Pension and Medicare, to being all about a debt levy on higher income earners.
And self-funded retirees, who may not have to pay the levy, are starting to look like they could be the biggest winners on May 13.
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Prime Minister Tony Abbott and Treasurer Joe Hockey are now facing intense debate within their own party room over a temporary levy or tax hike on higher earners. Even business groups and conservative commentators such as Miranda Devine have turned on the PM.
But the proposal delivers on a promise made by both Abbott and Hockey: that the pain of reining in unsustainable spending and getting the Budget back on track will be shared around.
And so it should be. The debt levy, or temporary income tax increase – reported to be targeted at those earning over $80,000 – is one way to make sure higher income earners do their bit to rein in the unsustainable spending of previous governments.
It’s not the only way, of course, and may not be the best way. Reports suggest the debt levy is still being hotly debated within Government circles, and may yet take a different form.
As we know, many of the Budget rumours at this time of year end up being just that: ideas floated by Government or lobby groups and then killed off because of the adverse reaction.
Time will tell. But in the meantime, we intend to ask our members what they think of any proposed measures and report back before Budget day, so please tell us what you think if you haven’t yet done so:
