I have noted many times before the various blunders made by former Treasurer, Peter Costello, which have worsened the long-term sustainability of the Budget, in addition reducing equity. These include:
- Freezing fuel excise indexation in 2001 (costing more than $5 billion annually today);
- Greatly loosening the assets test to qualify for the part Aged Pension and the Commonwealth Health Card;
- Implementing generous “transition-to-retirement” superannuation rules, assisting those approaching retirement to avoid paying tax;
- Implementing tax free superannuation for those aged over-60, a move dubbed by Saul Eslake as “one of the worst taxation policy decisions of the past 20 years”;
- Removing the superannuation surcharge on high income earners; and
- Halving the rate of capital gains taxes (CGT) in 1999, which pushed up house prices, overwhelming benefiting the rich, and now costs the Budget some $4 billion in revenue foregone.
