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Tax cuts alone won't boost Australia's ailing economy

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There are about two and a half million people in Australia without employment ("Tax breakthrough spurs nation to work harder for its future", July 6-7). About half of them want more work than they can get - and about half of them have no work at all. So what does a tax cut for the rest of the community do for these citizens, how does it help or motivate them, especially if certain kinds of work are so hard to get - particularly in the regions? But the main question is this: to kickstart or save the economy during the last decade or so, interest rates have had to be lowered to just about zero - and it hasn't worked. So how far will we now need to cut taxes to revitalise the thing - to get it to grow the way we want it to? Do we have any firm objectives or idea at all - or will the tired old mantra of "lower taxes" become our new zero interest rate horizon?
- Peter Bower, Naremburn

Surely their could be no better stimulus to the economy than the commencement of the Very Fast Train (Brisbane, Sydney, Canberra, Melbourne)? Jobs, decentralization, transport alternatives (fewer planes), associated business contracts, cuts to pollution, bipartisan support. However, all this relies on a Morrison government being visionary. - David Goldstein, Balgowlah

Tom Switzer is being disingenuous by comparing apples with oranges. Yes, Sweden does have a company tax rate of 22 per cent, but if we're talking income tax rates (which we are), Sweden has a top rate of 56.9 per cent (compared to Australia's 45 per cent) and it kicks in at one and a half times the average income. As it stands, Australia's overall rate of taxation, including income tax, company tax, etc., is about 27 per cent of GDP, compared with Sweden's 42 per cent. So tell me again how we're going to pay for Gondki and the NDIS if we keep reducing taxes on an economy that fails to function in a low tax environment? - Rodney Crute, Hunters Hill

Mr Switzer shows very poor conservative values in his column, wherein he worries about lack of funds and prosperity and describes government and community efforts to better educate our children and assist people with disabilities by writing: "the government won't have the growth it needs to fund the former Labor government's big spending programs, such as Gonski and NDIS." Well, there you are then: let them eat cake. How dismissive and condescending of popular social programs which have also been supported by successive Coalition governments, and ignoring the humanitarian and improved social values they bring to our society. We are a society after all, not just an economy. - Phillip Kerrigan, Mortlake

Tom Switzer rests his argument on people working harder if their take-home pay increases. But this only applies to people who have the option of increasing their hours substantially. $1024 a year equals about $20 a week, which is about 50 cents an hour extra. Most part-time workers are desperate to increase their hours, but don't have that option. For full-time workers, why would you work harder for a boss who didn't even give you the twenty bucks. Working extra time was worth it for overtime at double time, but for 50 cents an hour? So Tom, how will you do it - work harder because of the tax cut? What will you do? - Stein Boddington, St Clair

Illustration: Pat CampbellCredit:

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© The Sydney Morning Herald