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Yesterday the Herald Sun ran a front page story – headed TAX SMASH – and a follow-up story in which Terry McCrann aggressively supported an Abbott government decision to include in the Budget a levy on those with high incomes to help reduce the deficit (it actually appears that there was no “final” decision). McCrann estimated it would  yield about $3bn pa and backed his support with the argument that  “it is simply inconceivable that the Government could place all the adjustment only on the spending side”.

I spent a good part of the day trying, with John Stone’s help, to convince McCrann that such a levy would be bad news for the Abbott government from more than one perspective. Terry, however, stuck to his guns.

The exchanges with him are available here. Some points are worth reiterating here:

Today’s press (below, except for the AFR, which did not arrive on my doorstep) appears to confirm most  of the points I made to McCrann, although he has stuck to his guns and has not addressed a number of the points I made to him. This deficit levy proposal can now only be described as a first class cock up and it would not be surprising if it does not proceed.

Des

For copies of the articles referred to in this commentary please contact Des by email.

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