Exclusive: Australia Institute says debates about funding what people need should not be decided by limits and targets
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The treasurer, Scott Morrison, describes it as the “speed limit” on taxes but a new paper says the Coalition’s 23.9% tax-to-GDP cap is an “arbitrary” limit that will push the government to make austerity cuts to fund new programs.
While a dramatic improvement in revenues has given the Coalition room to ditch the planned $8bn Medicare levy increase and offer income-tax cuts, the Australia Institute has warned in a briefing note that the combination of a limit on tax and a surplus target will necessitate spending cuts in future.
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