Hockey set to bring in debt tax of $800 to $8000 a year
TREASURER Joe Hockey is set to bring in new taxes ranging in size from $800 to $8000 a year to tackle the nation's growing debt.
The new 'deficit levy', which is being strongly opposed by business group leaders, will target those on more than $80,000 a year, according to News Corp reports.
Taxpayers in the 37c tax bracket - on incomes of $80,000 to $180,000 - are likely to pay an extra one per cent in taxes a year.
Based on that formula, a taxpayer on $80,000 will pay an extra $800 a year - around $15 a week. Someone earning $150,000 will pay an extra $1500 a year ($29 a week).
Those on $200,000 will be hit with an extra $4000 a year or $77 a week.
A taxpayer earning $400,000 will pay $8000 extra tax, or $154 more a week.
The levy is expected to last four years.
Mr Hockey has put Australia's deficit at $123 billion, based on last year's Mid Year Economic and Fiscal Outlook (MYEFO).
It is the total of projected deficits over the forward estimates through to 2016-17.
The Treasurer has also referred to a $667 billion debt figure comes from Treasury projections for 2023-24.
The Opposition has blasted talk of a deficit levy as 'deceitful, voodoo economics', while the Business Council of Australia has urged the government to tackle more fundamental reforms to get the economy fixed.
The news comes as Prime Minister Tony Abbott used a speech in Sydney to outline plans to make it tougher for new retirees to qualify for the age pension after the next election.
He called on Australians to put the country first on budget night, focusing on what was good for the nation, rather than their own individual losses or gains.
But he ruled out changes to the pension in this term of government.
Deloitte calls for calm ahead of Hockey's first budget
THE ABBOTT government's first budget may not be as bad as the politicians are making out, a report from economic analysts at Deloitte claims.
As Australia waits for Treasurer Joe Hockey to unveil the full brunt of his "end of the age of entitlement" budget, the Deloitte Access Economics report disputes how hard it will cut.
Deloitte analyst and former Treasury official Chris Richardson wrote in his quarterly business outlook it may be one where "the government talks big but acts rather small".
While Mr Hockey's rhetoric has focused on telling Australians all will have to do the "heavy lifting", such language may simply be softening the ground for a more moderate budget.
The full potential for cuts, expected to be shown when Mr Hockey releases the Commission of Audit report on Thursday, has also been undermined by Mr Abbott's election pledges not to cut many spending areas, including health and education.
Mr Richardson wrote the Coalition's first budget since returning to office would more likely be a "softly, softly approach" on the grounds the economy was too fragile to withstand big cuts.
"That approach would merely repeat the experience that Australia had under the previous government, who also liked to talk big but act small," he wrote.
"To be clear, we wouldn't argue for big cuts tomorrow: that would indeed unnecessarily hurt the economy.
"However, the government should release the Commission of Audit, start making its case to the electorate for cuts (and tax increases), announce those measures in May's Budget, and have them taking effect over a number of years."