THE government and opposition have engaged in a war of words over tax cuts.
On Saturday, Opposition Leader Tony Abbott told the Liberal Party’s federal council meeting a coalition government would deliver income tax cuts that would not be used as compensation for a carbon tax.
Mr Abbott said the coalition would fund tax cuts through prudent government spending and improvements in economic productivity.
“Our tax cut will be a permanent reduction in the size of government to fund a permanent increase in people’s prosperity,” he said.
Voters were “not mugs” who’d be fooled by the government’s plans to reduce tax to compensate for its carbon tax.
“They know that a tax reduction to compensate for a tax increase is not a cut, but a con,” Mr Abbott said.
“They also know that any tax cut won’t keep pace with a carbon price going up and up and up in order to force changes in the way everyone lives and works.”
But Ms Gillard, who restated her government’s intention to deliver tax cuts as part of the government’s carbon price compensation package, said Mr Abbott’s plan was baseless.
“Money doesn’t grow on trees,” she told reporters in Perth.
“You don’t wander around and see dollar coins somehow magically appearing out of thin air. in front of your eyes. You’ve got to know where the money is coming from.”
Ms Gillard said the government’s compensation package would be funded through the carbon tax imposed on Australia’s biggest polluters.