Howard’s tax avoidance cave-in

Date: 10 July 2001

The Howard Government has abandoned ordinary working families by breaking its promise to crack down on business tax avoidance by so-called independent contractors, the ACTU said today. Independent contractors will now be allowed to 'self-assess' their tax status.

ACTU Secretary Greg Combet said that sham contractors make a joke of the income tax system which applies to ordinary workers whose tax comes straight out of their wages. "The Howard Government promised to close this loop-hole as part of the overhaul of business tax, but it is now clear from the proposed 'self-assessment' that they are captives of the business lobby.

"John Howard's cave-in to business pressure yesterday will cut revenues for tax relief for working families, education and health care," Mr Combet said today.

Mr Combet said that John Howard and Peter Costello had promised that the recent cut in the company tax rate would be 'revenue neutral' because there would be a tightening up on tax avoidance through the use of trusts and sham contracting arrangements.

"Howard and Costello have squibbed it on both counts. Trusts were put in the too hard basket, and now the taxation of contractors has joined them there," said Mr Combet. "This will further undermine the budget bottom line.

"This breach of promise comes after the Government ruled out tax relief for low-paid working families, and when Tony Abbott is blaming working people for being poor through individual choice.

"This Government is only too willing to listen to special business interests, but if you are a PAYE employee struggling to give your family a decent life, then Tony Abbott says it's your fault," Mr Combet said.

For further information

Contact:	Jeremy Vermeesch
Union:	ACTU
Phone:	03 9663 5266
Contact Mobile:	0408 513 849
Fax:	03 9663 8220
Email:	media@actu.asn.au
WWW:	http://www.actu.asn.au/

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