Two Voices in the Wilderness -- "Taxwise". (December 16, 2005)

     With the announcement of a projected federal budget surplus of $11.5 billion the expected 130db clarion call for a  T A X   C U T  was heard throughout the land.

FASTS President Tom Spurling

On the other hand no reference was made by the government to Australia's current account deficit and what useful measures it might take in the medium and long term to rectify the matter.

As to those two voices in the wilderness?

Andrew McCallum from the Australian Council of Social Services (ACOSS) says [that rather than across the board tax cuts] the money would be better spent improving health care and education.

And the newly installed President of the Federation of Australian Scientific and Technological Societies (FASTS), Professor Tom Spurling, pleaded, "Don¹t splurge the surplus just on tax cuts" and pointed out the obvious that the surplus  presented the Government with an excellent opportunity to increase investment in future productivity growth, not just tax cuts. "Long-term wealth is dependent on strong research and innovation. The Government should resist the clamour to constrain the debate around the surplus to tax reform. Tax cuts are but one way of spending the surplus."

Professor Spurling continued, "There is compelling evidence that judicious investment in R&D provides high returns to the economy and creates high skill, high wage jobs. A report released this week by Allen Consulting demonstrated that the Cooperative Research Centres have provided an additional 60 cents in every dollar invested by the Government over what would otherwise have been
generated by other Government expenditures.

"The size of the current and projected surpluses means there is no financial reason why the Government should not re-invigorate its investments in innovation and R&D," concluded Professor Spurling."

On the other hand from the viewpoint of the government of the day (and the Labor opposition seems little different) - just how many Brownie points (as in votes) does it calculate it would get from the punting Australian voter if those billions actually went to servicing health and educational services at the expense of a tax cut.

Current account deficit -- who cares.