Last week, we attacked the hypocrisy of former Treasurer Peter Costello for slamming the Turnbull Government for not doing enough to reduce government debt, given it is precisely the policy decisions made when he was Treasurer that has placed the Federal Budget in its current precarious position.
Today, Peter Costello has dialled-up the hypocrisy to another level, praising the Turnbull Government’s $140 billion seven-year plan to cut personal income taxes, while still whining about government debt. From The Canberra Times:
Former treasurer Peter Costello has heaped praise on the Turnbull government’s $140 billion income tax cuts for delivering tax relief to the “forgotten people”…
Mr Costello backed the government’s long term plan to deliver tax relief to high income earners, a group he described as the “forgotten people”…
Mr Costello reserved his highest praise for the second phase of the government’s income tax plan which increases tax thresholds and abolishes the 37 cent tax rate from 2024-25.
“If you could get a 30 per cent rate in there between $40,000 and $200,000, that is really good tax reform and that’s the kind of thing we really want,” Mr Costello said.
“…that is good tax reform: lower rates, less thresholds. That is very good tax reform, no doubt about that, in a design sense”.
Mr Costello, who is chair of the government’s Future Fund, also warned of a “ticking time bomb” in the budget as more people become eligible for the age pension…
“This is the biggest time bomb ticking in our welfare system,” he added.
While supporting the budget’s tax cuts for high income earners, Mr Costello repeated his warning that higher government debt left Australians more vulnerable to the next economic downturn.
“We’d just be far more exposed when we go into the next financial downturn,” Mr Costello said.
Righto. So Costello is concerned about Australia’s Budget deficits and the escalation in federal debt:
And yet he strongly supports $140 billion of income tax cuts, which are overwhelmingly targeted at high income earners, which will obviously make the structural Budget deficit and government debt worse! Talk about a walking contradiction.
Costello’s complaint about the rising cost of the Aged Pension is also laughable given the policy decisions made by him as Treasurer made the retirement system much more generous, specifically:
- Greatly loosening the assets test to qualify for the part Aged Pension and the Commonwealth Health Card (now reversed by the current Government);
- 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;
- Implementing generous “transition-to-retirement” superannuation rules, assisting those approaching retirement to avoid paying tax;
- Allowing the conversion of franking credits into cash refunds for shareholders in 2000, which costs the Budget around $6 billion today.
Seriously, why does anybody still listen to this bloke on Budget-related matters?
