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Why your tax is about to be pushed into the spotlight
The budget is just a few weeks away. The Federal election is likely within a year.
Over this time, you will be hearing a lot more about tax. Some will claim the tax-take of the government in Australia is high and that cuts in company and personal income taxes are a necessary policy aim. Others will claim a decent amount of tax revenue is needed to fund the services the people demand from government, namely health care, education, roads, defence, pensions and the like. Closing loopholes and getting rid of unfair tax breaks, collecting more tax in other words, will allow billions of dollars to be directed from the wealthiest so that these services can be funded.
All this assumes, quite plainly, that responsible economic policy delivers budget surpluses when the economy is strong and allows for deficits when the economy is soft or downright weak.
But let’s have a look at a few of these claims on tax against some hard and fast facts.
The RBA Governor, Phillip Lowe, suggested that when interest rates do increase, it “will come as a shock to some people”.
On this, Lowe is spot on.
It has been 7 and a half years since the last interest rate rise from the RBA which means that those who have taken on debt since November 2010 have only see their interest rate stay the same or move lower.