Treasurer Wayne Swan says he believes the Australian community is increasingly on board with government tax policy.
Speaking at The Tax Institute’s 27th national convention in Canberra, Swan said the tax is “a no-brainer to use massive mining profits to help those millions of businesses who aren’t in the fast lane.”
But shadow minister for finance, Andrew Robb has warned the government is relying too heavily on growth in Chinese demand for resources.
“China has revised its growth estimate down from 8.5% to 7.5%,” Robb told ABC radio today.
“For the Gillard government, the China resources boom has been like the overtime the factory worker once enjoyed. But boom times don’t last forever.”
Later, in an address to the Victorian Employers’ Chamber of Commerce and Industry (VECCI), Robb said the federal government was on a ‘hope and a prayer’ that China’s strength would continue to fund its spending measures. He warned a deterioration of Europe’s debt crisis could lead to faltering demand for China’s exports and damage Australia’s economy.
But Swan went on a spirited defence against the opposition’s sustained attacks on the carbon and mining taxes.
“The Howard-Costello Government was – and remains – the highest taxing government in Australia’s history. We inherited a tax-to-GDP ratio of 23.7% and have kept the tax take substantially lower than that ever since,” he says.
“Stephen Koukoulas recently reminded us that we have never had a tax-to-GDP ratio exceeding this, but Howard and Costello did, in six of their last eight years in government.”
The minerals resource rent tax (MRRT) is expected to clear parliament early next week.
The 30% tax on the extraordinary profits of coal and iron ore miners and the carbon tax will apply from July 1, 2012. Tax cuts for small business and low income earners will start at the same time.