The public warms to tax cuts

The odd desire of Australian voters to fight inflation with their tax dollars might be coming to an end.

A poll reported this morning in the News Ltd tabloids found, for the first time in recent polling, more for respondents for the tax cuts than against even after they had been alerted to the possible interest rate consequences.

The Galaxy Poll question read:

Do you think the government was right or wrong to introduce tax cuts, given the risk they may pose to inflation and interest rates on home loans?

49% thought it was right, and 31% said it was wrong. Only last week, The Australian reported a Newspoll that found 53% against the tax cut when told that it might increase interest rates.

The poll also asked a budget better off/worse off question. 23% say they will be better off, which is likely to under-state the real figure, and 33% say they will be worse off, which is unlikely unless they are very heavy alocopop drinkers, a luxury car buyer, or a pensioner about to be hit with hefty private health insurance fund premium increases.

There is a pattern of budget benefits being understated and losses overstated. Even with last year’s budget, which so far as I could tell had no losers beyond new commerce students paying higher HECS, Newspoll managed to find 14% of people who thought that they were worse off, and only 36% who thought that they would be better off.

These polls read the politics of the budget more than its reality. But with pensioner protests in the streets, Labor may now start to realise that by relentlessly droning on about ‘working families’ other households may start to feel like losers.

Update 20 May:
Today’s Newspoll adds to the surveys on voters’ macroeconomic opinions. 50% think that the Budget will make no difference to inflation. 28% say it will increase inflation. And 12% say that it will decrease inflation. Not many people seem convinced by the government’s claims that the budget will help reduce inflation.

5 thoughts on “The public warms to tax cuts

  1. Andrew, I agree that the Government needs to review its rhetoric on ‘working familiea” but you may be overdoing the bit about “hefty health insurance premium increases” in the pipeline. Remember that there is still a big inducement to insure given that the premium rises as one ages and there is a 30% rebate. Moreover the ultimate decision on premiums rests with Roxon.

    Remember that most of the whining is coming from vested interests. As a classical liberal, do you approve of penalising people who fail to buy a particular product on the market? There surely needs to be a strong public interest case for it. I agree with the ACA that the funds will now have to get off their backsides and sell their services much better, like everyone else in the market place.

    This is not to deny that the increase in the penalty threshold was excessive and may cause some unnecessary disruption.


  2. Fred – These are the problems you get when you create new distortions to patch up old distortions. As a classical liberal I don’t support being pressured by the tax system to buy a particular product; but that means I also don’t support being taxed to pay for public health services that I don’t want.

    But whether the policy change is good or bad, the reality is that relatively health people will drop private health insurance and force up premiums for those who remain. Roxon won’t reject changes based on real cost increases. The only question is by how much rates will increase.


  3. “Labor may now start to realise that by relentlessly droning on about ‘working families’ other households may start to feel like losers.”

    As a working single, it certainly gets right up my nose. Pay for your snotty-nosed kids yourself, or learn how to use contraception properly, you bludgers! 😉


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