HALF-a-million workers face a tax trap that will force them into higher tax brackets following last week's Federal Budget. Bracket creep is the secret to the Treasurer's path to a budget surplus by 2013.

Increased wages and more jobs are set to deliver a $22 billion tax bonanza into federal coffers, the vast majority of it coming from middle to lower income families, and it will probably deliver more than 10 times the value of the controversial $2 billion freeze on some family tax benefit payments.

http://www.news.com.au/money/federal-budget/tax-by-stealth-erodes-workers-wages/story-fn84fgcm-1226056000878

Wayne Swan was right, this is a Labor budget. It reduces the deficit not by cutting spending, but by increasing taxes.

I am sure almost every poster will not agree.
John Howard wasted our mining boom number one with endless tax cuts.
And introduced middle income welfare.
Normally such a thing would have bought about a conservative out cry, and rightly so, if it was an ALP act.
Rudd, unfortunately,did not stop the planned tax cuts in his time in office, cash this country could have used in the GFC.
Most informed commentators agree with Abbott this surplus in 12/13 will be made in China.
It has always been the very sole of conservatives to not grow welfare, yet plaintive bleating, trying to convince us $150.000 a year is not middle class income is, well surely At best a lie.
Remember unemployed/pensioners/low income earners take between 7 and 5 years to generate that income.
Stealth?
In the case Abbott won an election today he would cripple this country with child support for those on that huge income.
Rather more out there than usual old mate.

Belly,

Howard ran a surplus, established a future fund, and could afford the tax cuts.

With an even bigger mining boom Juliar is running a deficit, increasing taxes, hiding the oosts of the NBN, and yet has almost nothing to show for the billions squandered.

"Running a surplus" is an easy phrase to drop into the conversation - it sounds so... worthy.

What it means, of course, is that the government is extracting more from its citizenry by way of taxes, than it is spending. Quite how this makes Costello some kind of saint has always been a mystery to me - some kind of fiscal pea-and-thimble trick.

"Running a surplus" is not necessarily virtuous, since it is removing excess dollars from the pockets of the people. Governments justify this on the basis that if the huddled masses spend it, they will be likely to create inflation. Too many dollars chasing too few goods and all that.

Nor, of course, is deficit spending an unequivocally good idea, as it builds up debt on which interest needs to be paid.

The trick, so most well-trained and pragmatic economists tell us, is to run a surplus while the going is good, when it is not noticeably disadvantageous to the average punter, and switch into deficit when the going gets tough.

Sounds familiar.

As for the "Tax by stealth on workers wages to return the surplus" tag line, there are only two ways to return to surplus.

Raise taxes, or cut government spending.

If you've found another way, Shadow Minister, there are a lot of Finance Ministers around the world who would pay handsomely for the information.

SM
In the article you linked to, the reporter notes Costello did the same thing 10 years ago.

Howard built up a surplus and watched as infrastructure became inadequate in our biggest cities and hospital waiting lists grew beyond control. The once mooted Fast Train never eventuated despite raising monies for that purpose.

The Coaltion surplus went towards the most indecent pork barrelling and middle class welfare ever seen in this country, while watching as real services declined.

Australians seem stuck between the wasteful spending and lack of oversight of the current lot and the squirrelling miserliness of the previous lot. Surely there is some sane political group somewhere in the middle that can aim to raise taxes for the purpose they were intended while ensuring any deficit is kept to a minimum.

Otherwise, what is the fuss about. If wages go up and lands you in the next tax bracket you are paying as much as anyone in that tax bracket.

Pericles is spot on. There are only two ways for governments to raise money.

Opposition for opposition's sake is not a worthy stance it only makes the participants look desperate.

Every budget contains things to criticise but overall this one's good. We were worried it would be tough and it is - especially on the better off. However, the big tick items are in mental health, vocational education and training, regional infrastructure, and workplace participation initiatives such as employer subsidies to give the long-term unemployed a job.

Wayne Swan has delivered a responsible, credible, progressive financial blueprint for the next three years. The Opposition's performance in response has been woeful making their one-dimensional tactics of single-minded opposition not very effective and showing their empty policy cupboard to be that much more apparent.