Libs favour rich as Labor picks the restSydney Morning HeraldMay 14 2005By Matt WadeIf the Coalition's budget tax cuts are pitched more to Mosman than Cabramatta, Labor has focused on Wentworthville.
Kim Beazley's pitch to mortgage belt families is illustrated by the contrasting fortunes of different income groups under the Government's budget tax cuts and Labor's alternative.
For a couple who both earn more than $125,000, the budget tax relief will deliver a handy $9004 a year - or $173.15 a week - from July 1 next year.
They will also benefit from the elimination of the superannuation surcharge which applies to those with incomes above $99,000.
However, under Labor's plan the combined tax cut for a couple both earning more than $125,000 would be slashed to $4207.84 a year - or $80.92 a week. They would also continue to pay a surcharge of 10 per cent on their superannuation contributions.
By contrast, a dual-income couple with annual earnings of $55,000 will get a tax cut of $492 a year, or $9.46 a week, from the Coalition, versus $1069.12 a year, or $20.56 a week, under Labor.
This means Labor's plan more than halves the tax cut of the dual high-income couple compared with the Government's proposal, while more than doubling the tax relief for the middle-income family.
The Treasurer, Peter Costello, accused Labor of waging class warfare by opposing the Government's tax cut plans.
"Kim Beazley has been running envy politics all week," he said after the Opposition Leader's budget reply.
But Mr Beazley said the Government's tax plans did not do enough for middle- and low-income earners. "It makes no sense to skew tax cuts towards those who have already enjoyed the greatest gains from our recent prosperity," he said.
The budget shows that eliminating the superannuation surcharge will cost $2.5billion over four years.
Under Labor's plans the surcharge will be maintained to help fund its $24.1billion tax proposal even though it opposed the introduction of the tax on high-income earners.
Scrapping the surcharge means workers earning $130,000 will have their superannuation contribution increased by a minimum of $1170 a year. The Association of Superannuation Funds calculates this will boost the lump sum superannuation payment from $427,000 to $483,000, assuming no salary sacrifice for 30 years.
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