Under ALP Who Runs The Economy?

From Andrew Bolt "Rudd Rushes Out Most Of Costello's Tax Plan, Then Adds A Candle" except that candle can bankrupt the unwary ..

Kevin Rudd does about as well on tax as he could hope:

"FEDERAL Opposition Leader Kevin Rudd has announced what he calls Labor’s long-term plan for tax, deferring tax cuts proposed by the Government and using the money to pay for education tax breaks…

Parents of primary school students would be able to claim up to $750 of their outlay on education when they filed a tax return and parents of secondary school students would be able to claim up to $1500.

“The eligibility for this would extend to all those kids in Australia whose parents currently receive family tax benefit A and that’s more than two million Australian kids,” he said…

Mr Rudd said a Labor government would embark on a six-year plan to reform the income tax system, reducing the number of tax thresholds from four to three by 2013.

“Our goal would be that we would have three rates - 40, 30 and 15 (cents in the dollar),” he said…

Mr Rudd said Labor’s tax cuts would be worth $31 billion, less than the Government’s $34bn package…

Labor would save $2.9 billion by not implementing the Government’s proposed tax cuts for people earning more than $180,000 and would spend $2.3 billion on education tax refunds, leaving $600 million."

The education tax deductions are on balance good, I feel. At least politically.

But, hmm. Total cost of yesterday’s announcement is almost bang on the $34 billion the Government promised on tax cuts on Monday. Curious coincidence - picked up straight away by Peter Costello.


“It is now clear Labor never had a tax plan,” Mr Costello said in Melbourne.

“Mr Rudd and Mr Swan do not understand the Australian economy. This is entirely clear from the fact they have spent four days copying 91.5 per cent of our tax plan.’’

The bit not copied, he says, is the tax cuts for high income earners which were switched to the education tax refunds.

But Rudd looks at his best when he seizes a laptop computer during his press conference and says these are the “toolbox of the 21st century”. Parents on family tax benefit A will be able to claim deductions for them under his plan.

I’m not convinced that laptops for primary students are essential, but it’s excellent symbolism for Rudd, fitting in beautifully to his image of freshness and the new century, with his Mandarin speaking and his broadband plan. The foolish will add his greenhouse policies to that.

Much more of this is necessary. Let’s hear more from him on scholarships, high tech, universities, trade and the like. But also on measures to bring along those at risk of being left behind. Freshness and movement must be his watchwords.

UPDATE

Reader Alan RM Jones isn’t so sure the education deductions are sound economics:

"How the heck is the ATO going to monitor that? Are these things for the family, the parents and kids? Will they have to have a pro-rata system like home office deductibility? ... Sounds like another compliance nightmare and more bureaucracy – the ALP’s specialty."