I’m in Australia for Consilium, an annual conference which is hosted by the Centre for Independent Studies.
I spoke on fiscal policy and pontificated on the need for nations to restrain government spending.
That’s an important message (at least in my humble option), but I thought it was more interesting to learn more about the tax and spending policies of Australia’s current government, which is led by the supposedly right-of-Center Liberal Party (Aussies still use “liberal” in the European sense of classical liberalism).
Unfortunately, I learned that the Australian Liberals (like British Tories) need some remedial work on fiscal policy.
Prime Minister Abbott and his team, for instance, have proposed to increase Australia’s top tax rate. Here’s some of what’s been reported by the Australian Financial Review.
The Abbott government’s deficit tax means top earners will face a 49 per cent marginal tax rate, the eighth highest among developed countries. …. Australia already holds one of the highest personal income and company tax rates in the OECD. The 30 per cent corporate tax rate and 45 per cent personal income tax rate are higher than the average of 25.32 per cent for companies and 41.51 per cent for individuals. A personal tax increase will worsen the impact of “bracket creep”. …a higher income tax rate could also make Australia less competitive globally.
And the AFR also reports that a visiting scholar has thrown cold water on the idea of mimicking European fiscal policy.