5 October 2004

How Labor Doctored Its Own Tax Policy

In its tax policy, Labor claimed that the labour supply would increase by 72,000 people and that $1.2 billion in revenue would be created to pay for the policy.

However, when it submitted its policy for costing it claimed no "participation dividend" (see attachment). In response to continuing criticism Labor then submitted its "participation dividend" for costing on 4 October 4 days after the deadline for costings set by the Secretaries of Treasury and Finance and Administration and 27 days after the policy was announced.

In its tax policy, Labor claimed that the reversal of a GST measure would raise $346 million in 2005-06.

However, when it submitted its policy for costing it excised this claim. In response to mounting pressure to submit all of its policies for costing, Labor then submitted its GST reversal on 4 October 4 days after the deadline for costings set by the Secretaries of Treasury and Finance and Administration and 27 days after the policy was announced.

In its tax policy Labor claimed $412 million from extra ATO compliance.

However, when it submitted its policy for costing this "ATO compliance dividend" was excised. In response to continuing criticism Labor then submitted this policy for costing on 4 October 4 days after the deadline for costings set by the Secretaries of Treasury and Finance and Administration.

In its tax policy Labor claimed that the Working Tax Bonus would produce a weekly tax cut up to $8 per week for those earning less than $52,000.

However, when it submitted its tax policy for costing it no longer made this promise. The actual policy submitted was for 10 per cent of eligible working age people to receive no weekly benefit and for those eligible over pension age (for men 65 and for women 62) to receive no weekly benefit. This cuts out well in excess of one million eligible people.

Labor delayed their submission of its policies to Treasury and Finance to hide from scrutiny. And then it doctored its own policy.

Labor won't comply with the Charter of Budget Honesty because its policies don't add up.