Large Cits in Income Tax Proposed In Australia: Relief For Low Wage Group

Gisborne Herald, Volume LXXVI, Issue 22867, 10 February 1949, Page 5

Large Cits in Income Tax Proposed In Australia: Relief For Low Wage Group

(N.Z.P.A.—Reuter— Copyright.) CANBERRA, Feb. 9. Tlie Federal Parliamentary Labour caucus has approved of income tax cuts to operate from July 1, ranging from 4.6 per cent, on high incomes to 42 per cent, on low. They affect incomes from personal exertion only, ranging from £l5O to £15,000 yearly and will give most relief to people in low and middle income groups.

Members say there are indications that the Government will consider more income tax cuts to operate from January 1. The decision will save the taxpayers £36,000,000 next financial year. For taxpayers without dependants, the cuts start at 18.7 per cent on incomes of £l5O yearly and reach the peak at 31 per cent on incomes of £3OO to £4OO yearly before falling to 20.6 per cent on £2OOO. Taxpayers with one dependant will receive cuts of 38 per cent at £250; 31.2 per cent at £SOO and 20.8 per cent at £2OOO. , , Taxpayers with two dependants receive 38.7 per cent on £3OO, 42 per cent on £350 and 31 per cent on £6OO. In all cases the saving on incomes up to £2OOO will be better than 20 per cent, after which the percentages of the cuts drop away sharply to 4.6 per cent at the top level. Not Last Word in Reductions

The Prime Minister, Mr. J. B. Chifiey, is reported to have told the caucus that the cuts did not represent the last word in reductions if the revenues remained: buoyant. , It is understood there will be no immediate reduction in indirect taxation, but that sales and company taxation and customs and excise duties will be examined in the normal course of the Budget review later in the year. The last income tax cuts totalled £30,000,000 and were approved by Parliament‘last September, They formed part of Budget concessions totalling £60,000,000. “There still seems to be no relief from tax on income derived from thrift,” said Mr. G. R. McDonald, president of the Taxpayers’ Association of New South Wales. “It is strange to hear Mr. Chifiey one week ask people to save, and next week continue to tax saved income at the same rate. "Robbing the Thrifty” “The whole tendency of the Government taxation policy is to rob the thrifty.” “The new proposals involve liberal and welcome concessions,” says the Sydney Morning Herald, “although, once again, they are biassed in favour of one section. “When Mr. Chifiey first imposed really heavy taxation for war, he made the tax scale far too steep by graduating it so that it reached the maximum at £SOOO yearly. Ever since he has been aggravating this situation by cutting away taxes at the lower end much more heavily than in the upper and middle brackets. Already a man with a wife and children pay no income tax at all—only a social security contribution —until his income is £609 yearly. Since the war a man on £4OO yearly has had his burden reduced by 82 per cent, whereas the man on £SOOO has had his taxes cut by only 33 per cent.”