ALP’s $100bn tax hit to cost mum-and-dad investors [small business] and the aged

The Australian, August 14, 2017

Families and small businesses would cop a bill of more than $100 billion over a decade under federal Labor’s tax plan, new ­figures reveal.

Independent Parliamentary Budget Office modelling, out today, shows the cost of proposed tax increases to small businesses, mum-and-dad investors, older people and high-income earners under a Bill Shorten government.

Scott Morrison, stepping up his attack on Labor’s “unprecedented tax grabs” and its ­opposition to cutting company tax rates, told News Corp newspapers that wages would not rise and money would be ripped from the pockets of hardworking Australians.

The Treasurer will use the figures to argue that everyday Australians will be “in the sights” of a Labor government. He will also promise not to allow tax revenue to rise above 23.9 per cent of the economy over the next 10 years.

“Labor is dumping more than $150bn worth of taxes on the shoulders of Australian families with a six-shooting tax blast that will bring our economy to a standstill and put further pressure on household budgets,” he said.

“This is the grim reality of a Labor government led by Bill Shorten.”

The modelling reveals one signature Labor policy — limiting the use of negative gearing for everyday Australians — would be a $32bn hit. It shows investors would lose $13bn from increasing capital-gains tax, while businesses that use family trusts would be hit for $15bn.

Reintroducing the now-lapsed deficit levy on high-­income earners — a temporary government measure supported at the time by Labor — would cost singles and families $22bn.

About $20bn would be raised from superannuation changes by opposing the inclusion of catch-up concessional contributions, tax deductibility for personal super contributions and a lower high-income super contribution threshold.

Mr Morrison described the ALP plan as “tax upon tax upon tax to pay for Labor’s insatiable appetite to spend other peoples’ money”.

“That is a flat-earth argument that will penalise Australian families and whack small businesses.”

Department of Treasury figures show Labor’s opposition to the Turnbull government’s company tax rate would increase tax on small-to-medium businesses by $65bn over a decade. That is based on the unlikely assumption that the government’s full tax plan would pass the Senate.

Should Labor keep already legislated tax breaks for businesses with an annual turnover of less than $50m, which it is yet to promise, that $65bn would come down to $36bn over 10 years.

Frustrated Coalition MPs have blamed two weeks of fierce internal division over same-sex marriage for a failure to put pressure on the Opposition Leader over his economic credentials.