liberally taxed

The Liberals or should I say the Coalition not only introduced the GST but are the experts at introducing new taxes and levies.

The following story in the Age gives a good insight into the Coalitions love of new taxes and levies. Hypocritically Abbott now opposes a flood levy that will help Queensland rebuild its damaged infrastructure.

"The last time a federal government sought to protect a forecast budget surplus of $3.1 billion against an unexpected major expense, it decided to impose a levy. It was the Timor tax.

In November 1999, the then prime minister, John Howard, argued that the East Timor intervention, one of his government's signature achievements, would drive the budget into deficit.

Without the levy - a one-off increase in the Medicare levy of 0.5 to 1 percentage point for middle- and high-income earners - the $3.1 billion surplus forecast for 2000-01 would become a $500 million deficit.

Advertisement: Story continues below The levy, designed to raise almost $1 billion in 12 months, never went ahead because, come the budget in May 2000, there was more money than forecast. Nonetheless, the principle was there and so was the precedent.

The 1.5 per cent Medicare levy was increased by 0.2 of a percentage point in 1996-97 to fund the gun buyback - another of Howard's signature achievements - at a time the newly elected Coalition was fighting to return the budget to surplus. Levies - or taxes, as oppositions call them - became a staple of the Coalition.

There was the 11?-a-litre tax on milk, imposed to help the dairy industry restructure following deregulation. This agrarian socialist hit on consumers was introduced in 2000, and continued through the bountiful years when the budget was bursting with money. It was repealed by the Rudd government only in 2009, after collecting $1.75 billion, which was distributed to producers.

Sugar farmers were also helped more than once and there was the Ansett levy, the $10 slug on flight tickets to help pay out the minimum eight-week entitlements of the workers who lost their jobs when the airline went bust in 2001. That the Gillard government is considering a one-off levy to help meet what will be a massive and unexpected infrastructure repair bill caused by the floods is hardly surprising.

That the Coalition is vehemently opposed is also unsurprising, given its general approach to everything but, nonetheless, more than a little hypocritical. This is not only because of its own past form in government but Coalition policy still includes a levy - or company tax increase for big business - to fund a multibillion-dollar paid parental leave scheme.

Tony Abbott argued subjectively that the Howard government levies were different because they were not imposed by a government engaged in ''indulgent spending''. The previous levies were necessary, he said, whereas Gillard should find the money by cutting spending and flogging assets.

However, the previous levies were only necessary to protect a budget surplus, nothing else, which is exactly what Gillard is thinking. It could be argued that restoring roads and rail infrastructure, so vital to productivity and economic growth, not to mention the convenience of daily lives, is more compelling than any of the reasons the Coalition implemented levies, especially the looking after vested political interests in rural seats.

The final floods bill, yet to be calculated, is estimated to be between $6 billion and $15 billion. Not all of this could be raised by a levy without inflicting serious political damage. The budget will have to give and there must be spending cuts as well.

Despite business and unions giving the green light to stay in deficit a bit longer, Gillard is hell bent on returning to surplus in 2012-13, the same year by which other G20 nations have pledged to halve their deficits. Like Howard a decade ago, she, too, has a forecast surplus of $3.1 billion in 2012-13.

The next election is due in 2013 and by then, the floods in Queensland and elsewhere will have receded in the national consciousness, except among those poor coves who lost loved ones and property.

The Coalition will bang on about great big new taxes and offer little by way of solutions, other than footing the bill by flogging Medibank Private and scrapping the national broadband network, all while demanding a surplus budget.

If Gillard imposes a levy through, say, a temporary increase in the Medicare levy, it could start on July 1, last a year and be revoked well before the next election.

It would require political advocacy, something at which this government is atrocious, but with public sentiment in favour of helping the flood victims and big business, and the mining sector clamouring to get the place running again, it would be hard even for this government to mess it up".

http://www.theage.com.au/opinion/politics/gillard-has-time-to-levy-and-recover-20110123-1a16v.html