Hockey raises doubt over tobacco tax hike
The Liberal Party has left open the door to rejecting key tax increases as the first days of the election campaign are set to be dominated by which party can best manage the Budget.
Shadow treasurer Joe Hockey said yesterday the Opposition was concerned about the Federal Government's planned increase in the tobacco excise.
The increase, a series of 12.5 per cent rises over the next four years, would raise $5.3 billion. It was the single biggest boost to revenue in last week's economic statement.
Mr Hockey revealed the coalition wanted to consult with the health industry to see if the previous increase in tobacco excise - supported by the Opposition in 2010 - had cut consumption.
He also raised concerns about the impact of inflation resulting from the excise rises.
"We have deep concerns about the tobacco excise increase, because if you're a pensioner, a smoking pensioner, you will lose up to a third of your pension increase just on Kevin Rudd's new tobacco tax," he told the Ten Network. "Now, last time Kevin Rudd announced a massive increase in tobacco tax, he said it was all going to health."
Treasurer Chris Bowen defended the increase and tax changes in the economic statement, saying they would deliver long-term benefits to the Budget.
He said the structural savings, including an increase in the so-called efficiency dividend for the public service, would keep Budget pressures in check in the years ahead.
"Regardless of any individual's views on any specific save, this economic statement and the decisions it contains have improved the structural position of the nation's finances, now and long into the future," he said.
"To return the Budget back to surplus in a context of lower terms of trade is not only more difficult, but by itself it represents an improvement in the structural position of the Budget."
The Government has compiled its own figures on the Opposition's Budget position, claiming the coalition faces a $70 billion black hole.
That includes almost $20 billion in savings promised by the coalition at the 2010 election which have elapsed plus almost $13 billion extra for its policy to cut carbon emissions by 5 per cent by 2020.
Both claims were rejected by the Opposition which said its greenhouse gas policy was capped while it ridiculed the idea of counting promises from the last election.
But other promises remain problematic, including its stance on proposals such as the restriction on fringe benefits tax claims for cars (worth $1.8 billion), removing the means testing of the private health insurance rebate ($3.4 billion) and the repeal of the Government's emissions trading scheme support package ($8.6 billion).
