wa liberals not supporting turnbull and

Lindsay Tanner tells us why tax cuts are a bad idea...
Yahoo News...
The lone Liberal state premier, Western Australia's Colin Barnett, has defied his federal leader and is supporting Labor's $42 billion nation building and jobs plan.

Mr Barnett will attend a Council of Australian Governments (COAG) meeting convened for Thursday by Prime Minister Kevin Rudd to discuss the rollout of the massive array of infrastructure projects.

The federal government will need the co-operation of the states for the $28.8 billion infrastructure spending for school maintenance, road and rail work and new public housing construction contained in the package.

But the federal opposition says it will block the passage through parliament of six bills needed to get the program under way.

Asked on ABC Radio on Wednesday if the stimulus package should be opposed, Mr Barnett said that he would, as a state premier, work with the federal government.

"I don't agree with every aspect of it but I do agree that we do need to do all that can be done from government, both state and federal, to ensure that this economy keeps going," Mr Barnett said.

Mr Barnett agreed with Mr Rudd that the states must not cut back or dilute existing spending just because of the commitment by the federal government.

The Australian Greens want more time for the Senate to scrutinise the federal government's spending plans.

At the same time, they've criticised the coalition for opposing measures in the government's $42 billion economic stimulus package that support "the lower end of town".

The government needs the support of the Greens and two other senators to have its plan approved by parliament.

The government's timetable for parliament to pass the legislation - by Thursday - has angered non-government senators.

"Is that deadline dinkum?" Greens leader Bob Brown told reporters.

The Greens favour a Friday sitting of the Senate to discuss three bills relating to the cash payments and using Monday for discussion about planned infrastructure spending.

Senator Brown was not prepared to say how the Greens would vote in the Senate.

"We are not going to be obstructive, but we are going to be creative and we expect the government to respond to that."

The government wasn't the only "repository of ideas".

"The opposition is going to block, we hope we're going to improve."

Meanwhile, Finance Minister Lindsay Tanner says that federal opposition demands for tax cuts instead of government cash handouts would favour Australians already well-off.

Mr Tanner says permanent tax cuts have already been tried in the United States and have landed the country in diabolical trouble.

"(Opposition Leader) Malcolm Turnbull's proposition and (Deputy Opposition Leader) Julie Bishop's proposition is you give permanent tax cuts and somehow that will mean that tax revenue increases," he told ABC Radio on Wednesday.

"Now this was the theory that in the United States under George Bush led to ginormous and absolutely astronomical deficits and the end result is the US is in diabolical trouble on that front."

Mr Tanner said the tax cuts Mr Turnbull was arguing to be brought forward had actually already been factored into the budget this year to form part of an ongoing stimulus package.

"They are part of a sequence," he said.

"The first instalment of that was in the budget last year ... and the ones that are this year very much benefit middle- to upper-middle-income earners who are going to save more and, of course, they don't benefit people at the lower end of the scale, so just to do that would very much be favouring the better-off, which is precisely what you don't want to do.

"Now we are committed to getting out of trouble as soon as possible and that's why we are making these payments temporary."

Mr Tanner said a number of issues impacted on the government's decision to offer cash handouts to individuals rather than just ongoing tax cuts.

"The need to actually get money moving, so any tax cut of course is a given amount of dollars per week or per fortnight it doesn't all hit on one go, so that's one of the concerns," he said.

"We're very concerned not to sit around and just generally improve people's financial positions over an extended period of time, but to actually get money moving now because jobs are being lost now, we need that stimulus now."

Dave R.