Weeks before he was elected as Australia’s prime minister, Tony Abbott promised no new taxes, but with his first annual budget looming, Abbott yesterday would not rule out a so-called “deficit reduction levy” to be paid by higher-income earners.
Abbott has warned that his conservative government faces tough decisions to rein in mounting debt in its budget blueprint for the fiscal year starting on July 1. The blueprint is to be revealed to the Australian parliament on May 13.
Abbott, who came to power with a decisive election victory in September last year after six years in opposition, said that introducing a temporary levy in the budget might not break his election promise to introduce no new taxes.
“There’s been speculation, as you know, about a deficit reduction levy,” Abbott told Melbourne Radio 3AW.
“I think if there was a permanent increase in taxation, that would certainly be inconsistent with the sort of things that were said before the election,” he added, referring to his election promises.
Abbott would not say whether the levy would be in or not for next year’s budget, in keeping with previous government policies of keeping budget details secret until they are released to parliament. In practice, budget measures are usually published in unsourced media reports every year as part of government strategies to control the message and manage public expectations.
Sydney’s Daily Telegraph newspaper reported yesterday that Australians earning more than A$80,000 (US$74,000) would pay a levy to help retire national debt over the next four years beginning on July 1, charged at 1 percent for incomes of A$80,000 to A$180,000, and 2 percent for higher incomes.
Opposition leader Bill Shorten said such a levy would amount to a broken promise not to increase taxes.
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