To the Editor
I am writing in reply to the article you posted in last week’s newspaper titled “Increased State taxes will affect everyone” and while it is clear that everyone eventually pays for it as the author notes, the delicious irony is, the use of taxation done right is that everyone also benefits.
Those benefits are, of course, dependent on how the government decides to use it. When it provides support for coal or gas exporters for instance, that benefit all goes to overseas manufacturers who get Australian subsidised power to compete against Australian manufacturers.
That some of our tax funds are used to pay to welfare recipients is in many ways why we have a government, to take care of those people less able to do so than others. When it does of course, all of those funds are subsequently spent in Australia going back into the economy.
Dating back to shortly after Federation, the government of the day decided to create a pension plan that would see people on retirement receive a living income. Contributions were through an early equivalent to a national super scheme into a purpose-built fund.
In the late seventies, the then Prime Minister, Malcolm Fraser absorbed that fund of some hundreds of millions of dollars into consolidated revenue and the component people paid for it at the time was also absorbed into the overall tax base and the Liberals have been trying to deny aged welfare recipients benefit since from their lifetime of paying taxes.
While our current income tax level might be viewed as comparatively high, we no longer pay for social security as does every other country so it is trite to compare our tax to the rest of the world when they pay a slightly less income tax as well as a separate social security contribution.
The result is that our direct and indirect taxes are not the highest as the author laments but according to the OECD, what we pay is near the lowest.
The new taxes imposed by the State Government largely address the imbalance international conglomerates exercise with off-shore tax regimes, profit splitting and other nefarious tax dodges that Australians ultimately pay for.
Smedley Snodgrass
Shepparton
