The Coalition has begun the federal election campaign seeking to hammer Labor over tax projections that it says will total $387 billion over the decade.
It is the latest election salvo from the Coalition seeking to highlight the difference between its tax plan and that of Labor.
Treasurer Josh Frydenberg has led the charge, claiming the forecasts, which he said were put together by the Treasury but had not been released in full, would be equivalent to $5,400 for each Australian household over the 10 years.
Labor has not shied away from its proposed changes, with leader Bill Shorten using his budget reply speech to point out the differences between the parties on personal income tax.
He wants to repeal the flattening of the tax structure from last year’s budget, and is opposed to the latest Budget proposal to reduce the rate of Australia’s main tax bracket from 32.5 per cent to 30 per cent.
In an interview on RN this morning, Labor’s Penny Wong sought to focus on her party’s changes to franking credits and negative gearing she describes as “tax loopholes”, and emphasised that the additional revenue would be spent on services.
“I’m not walking away from the principle that we choose better schools, better hospitals, not bigger tax loopholes,” she said.
She only directly addressed the personal income tax cuts when pressed.
“We don’t think investment bankers should get an $11,000 tax cut per year when ordinary Australians get so much less, I think $5 a week in some of the scenarios,” she said.
“Now, we just don’t think that’s right.”
Investment bankers will benefit under the Government’s plan, but so will millions of other Australians.
The Budget projected 94 per cent of taxpayers would face a marginal tax rate of no higher than 30 per cent under the Coalition’s plan.
The source of the figures
The controversy today was about the source of the costings.
The Government has used Treasury figures but has not released the full modelling.
Under caretaker conventions departments are required to be independent during the election campaign.
Although it is not clear when the figures were produced, Mr Shorten criticised Treasury for providing them at all.
“Lets face it, these days quite often Treasury just says what the Government wants them to say,” he said.
Bureaucrats at Treasury may have provided costings in a response to a request from the Coalition in the week since the budget reply speech.
The ABC has unsuccessfully sought comment from Treasury today.
Labor has some costings, but has not released final 10-year estimates.
The Parliamentary Budget Office is providing Labor with its costings, not Treasury.
A question of how much
The Coalition is talking up the size of the difference in the parties’ tax plans: $387 billion is a big number.
The approach consolidates its position as the party for people who want to pay less tax.
Despite the controversy about the source of the figures, there is little difference between the Treasury figures and preliminary estimates previously reported.
The Treasury figures show Labor’s plan will raise about $20 billion in additional taxes over 10 years.
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This year’s Budget-noted tax receipts are set to be down by $15 billion over the next four years on previous estimates due to revised forecasts for household consumption, dwelling investment and average wages.
Similar changes to the economy over the next decade are likely to dwarf the difference between today’s Treasury figures and the amount Labor was dealing with.