~ AUSTRALIA& July 1977
ELECTORATE TALK
This week, millions of Australians have received more cash in
their pay packets simply because of the Government's personal
income tax indexation policies. The amounts of extra " take-hone"
pay are significant.
For example, a taxpayer with a dependent spouse earning a weekly
wage of $ 200 which is about the level of average weekly
earnings will have his weekly take-home pay boosted by
$ 3.45. This represents an annual benefit of $ 187.50.
A taxpayer with a dependent spouse, earning $ 12,000 a year will be
$ 257.50 better off; a taxpayer earning $ 13,000 a year will be
$ 310.70 better off.
The Government tax indexation policy not only affects the income
tax scale, but also tax rebates. For instance, the general
concessional rebate of $ 540 that applied in 197S/ 76 moved to
$ 610 last financial year and will increase to $ 676 this current
financial year.
Tax indexation does one simple thing it guarantees protection
to the community from unlegislated tax increases brought about
by inflation. In times of inflation Australian taxpayers
with increasing incomes have found themselves pushed into high
tax brackets under the progressive income tax scale.
As a result, they were really no better off than they were before
the wage increase and in some cases they were, in fact, worse off.
Last year, within a few months of the election, we stopped this
tax drain. In May last year, the law was amended to make sure
that indexation adjustments would occur automatically each year.
This law guarantees ' taxpayers that adjustments would be made to stop
inflation pushing the'm into higher tax brackets. There was an
indexation adjustment on July 1 last year, another one a few days
ago, and the next will occur in July 1978, and so on.
So taxpayers are continuing the reap the gains from tax indexation. ./ 2
I think it is worth making the point that the Liberal/ NCP government
introduced tax indexation in a time of severe economic restraints.
In revenue terms, the cost to the government has been considerable.
As a result of tax indexation from July 1 last year to June
next year, the government will take about $ 2,000 million less from
taxpayers than would otherwise have been the case.
In Australia now, for the first time, we have moved away from
the days when inflation and high taxation increases went hand in
hand. We have broken that link that was so destructive.
Tax indexation along with other reforms such as the Family
Allowance programme is providing more than just extra money
resources to Australians. It is, in no small way, helping to
reassert independence for many thousands, and in turn to enhance
personal dignity and self-respect.
It is that kind of achievement that this Government continually seeks.
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