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.

Howard also made deep cuts in essential services and sold off everything that wasn't nailed down. He also cooked the books by deliberately neglecting to fund Commonwealth Super for several years and the Future Fund was created to restore that imbalance. A pity they had to sell Telstra to do it.

That future fund is actually to fund Commonwealth pensions - the ones that only politicians and the defined benefit scheme that the Public Service "old guard" in Commonwealth Super get - not aged pensions as some are led to believe.

Most of his tax cuts were also aimed at the same higher income earners that are now bleating about caps in their welfare payments.

All government funds come from taxation (but I do recall Costello lost a billion on failed currency swaps).

Also "what wage rises?"

Pericles and Pelican,

" there are only two ways to return to surplus, Raise taxes, or cut government spending."

Precisely

When the economy is nearing full employment, why is the public service at record levels? Why is the government spend higher than ever?

If the government simply cut down on some of its more ridiculous projects, there would be no problem getting back to surplus. For example I saw a brand new 81cm LCD /DVD player on sale for $250. Why on earth spend $350 on propping up obsolete TVs?

While still thinking this thread is built in shifting sands this mornings polls need looking at.
Many are unhappy with my prodding my own party but today is the day to take notice.
Tony Abbott,his team,and some we know here,are selling their policy's.
Voters are buying them, well the policy, say anything even if untrue.
Now like in 1973.74.75,Labor is assisting, it is constantly changing direction, and jumping about like a live prawn on a BBQ.
Medea is slanted Gillard gone but my party lacks the heart to get the job done.
My fantasy posts in another thread, taking the roll of a new ALP leader is a prediction, the fire escape and the only one,for Labor.
Truth, even our country's interests are not even on the agenda, Medea/ Abbott are intent on removing government.
And will.
Another prediction, remember 74% supported climate change action once, Medea and Abbott killed that, and will kill this government,without change. Abbott has got away with not telling us his policy's, not being his real self,once in office he would become even less popular.
But without change, rebuilding a backbone removing the Gillard/Crean left overs from Latham my party is doomed.
Greens too but they will never recover from the coming fall, unable to compromise they have lost touch with reality.

Belly "John Howard wasted our mining boom number one with endless tax cuts"

I don't tend to think that taking less of what I earn from me is a waste. I'd rather get to make the choices about how my income is spent than have the government do it for me. Middle Class welfare - the ineffective tax cut you have when you are not having a tax cut. Part of the problem is that governments decide to help a sector which often pushes prices up and then they need to start subsidising more people for the cost of using that sector.

The same old issue of how do we help the genuinely needy without hurting others.

I do agree with the point made earlier about surplus's though, too much of it's an indicator that they are probably not spending on what they should spend on and are gouging too much from taxpayers.

R0bert

i have been waiting for the visuals[graphs]
to the surplus to be revealed

from what i know/hear
the deficite is steadilly climbing...up
but between now and soon..[2013?]

then
the graph plummets away to zero
[much like a stockmarket collapse]
now this indicates a huge influx of cash
[the only inflow to govt with cash...is the unmentioned 'big new tax']

at 25 bucks a tom
it reaps in 13.5 billion

at $50 it reaps in
over 25 million

so that budget[before it dolls it all back out again
mainly to its mates]..will read...'balanced'

but as we will then realise..
be only balanced..like a knife at your throat
is 'balanced'..[with your very survival being]..'in the balance'..

visualisations on the means to surplus
get very strong imagry...on the big new tax..

*incomes
and their indexed..
increases..

ok acually its too simple
there is of course the 8?..billion
from smokers

and the tax trade-off
with the minning tax/payers...[players]

[funny how 4 mil smokers..get their tax OVERNIGHT...
and the rich few miners..get to 'negotiate'..for years

clearly revealing..*who govt 'SERVES'

but ask where is the money comming from
from you ya mugs

howhard gave 25 billion to the 'average incomes'
that dug a huge hole..[clever sabotage from jonny]
giving out the cake..to his own

bring back death duties on all ausies
and ausie expats...

thats the ozzie way to created a ski-jump graph
stop taxing the allready poor[based on lies and spin]

social cost of smoking[31 billion]
but social costs are total of all cost's..including taxes we PAY
or buildings we build...or income from shops selling a LWEGAL product

medical costs for smoking is 800 million[medical cost]
how this was sold by spin was 31 billion[social costs]

your too clever by half juliar
you and yer mug backdoor guys in the backroom

and worse
toney abbot and costello
or the big gruff bear..or the lowly['x' bwanker]

sack federal govt alltogether
mandate set fes for extraction of set resources
install tarrifs on exported minerals/metals...

we got a job shortage
because the jobs are short term
needing new 'infastructure'..in places
no one will be living in 20 years..[when the minning jobs are done]

and the frakked gas wells
have poluted the waters of the deep/seep[the basin]

There is a third way gummint can raise funds; exactly the same way everyone else does.
The Gov could get into business. We could have such things as, say, a Gov owned Telco, or a Gov owned bank, or Gov owned insurance companies, or even a Gov owned airline.
Or hey. What about a Gov owned Super fund, that was actually guaranteed to pay out more than you put in, regardless of the vagaries of the marketplace?
All these enterprises could be profitable, employ more people, and offset our tax base.
They could also probably supply superior service, by not outsourcing to other countries, and provide a benchmark for upper management salaries and perks.
I wonder why no one's thought of this before?

Hey what a great idea Grim.

(If only)

Grim & Pelican

Imagine a world where public necessities were run for the benefit of the public and not for profit... long, long ago, in a galaxy far, far away...

Absolutely Ammonite and governments of all colours are intent on selling off all public assets without the persmission of the people. What is left to sell, there is still the Snowy Hydro - that will probably be next.

Wobbles nailed it on this post on page 2 for mine SM.