Friday, May 16, 2008

Nelson Promises Tax Relief On Party Drinks And Luxury Cars

The federal opposition leader Dr. Brendan Nelson has used the opportunity of his budget right-of-reply speech to practice a bit of good old populism. After being led to expect a harsh budget with deep expenditure cuts, Dr. Nelson was left with not much to criticize when the budget turned out to be much softer than many people expected. As a result the opposition leader has now promised to block the increased excise on pre-mixed alcoholic drinks, and possibly the increase in luxury car tax as well.

To add his own flavour to the recipe, Brendan Nelson additionally proposed a 5 cents a litre reduction in the excise on petrol, which would save the average motorist around $2.50 a week. Big deal. Any such one-off reduction would disappear in the next round of price rises and leave families no better off. That’s the opposition’s big idea.

Beyond that, the coalition also proposes to block the planned lifting of the threshold for the medicare levy surcharge, claiming that the expected exodus from private health insurance will not only drive up premiums, but increase the pressure on public hospitals. The fact is that while people might choose to drop their private cover, nobody is forcing them to. Everybody is free to choose private health cover. The threshold for the surcharge has never been changed since it was introduced as a measure aimed at the affluent. Since then the average income has passed the $50 000 mark, and the surcharge has been hitting battlers. It had to be changed.

Dr. Nelson also took special care to mention aged pensioners and carers. Unfortunately special mention is about all they get with no actual concrete plans to increase their payments or to make their bonus payments a permanent feature. And, to the disappointment of many he said nothing about the disabled.

The reply speech by Brendan Nelson had no big ideas, no bold visions. Although plenty of words were spoken, not much was said. That’s why the headlines could find nothing more to write about than the alcopops tax and the petrol excise, both of which are populist statements on issues that are well removed from the main game of economic management.

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