PM pledges tax cuts for all

The Prime Minister John Howard yesterday fired the first salvo of the election campaign by promising to cut taxes by $34 billion over the next three years. The cuts are designed so that every tax payer benefits and those on average earnings would get an extra $20 per week from next June, increasing to $35 per week by 2010. The top marginal tax rate would be eventually be reduced to 42 per cent while the tax-free threshold for low income earners will be increased to $16,000. Implementation of the changes is being staggered to reduce the impact of the cuts on inflation. Mr Howard also said that there was an “aspirational goal” of cutting the top tax rate to 40 per cent and raising the tax-free threshold to $20,000 by 2013, but these would be dependent on reforms encouraging 65,000 people into the workforce by 2011.