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May 10th 2005

Australia announces tax cuts

After their victory in last month’s election, Australia’s center-right coalition has announced sweeping tax cuts. The government will return a $16 Billion budget surplus to citizens and businesses over the next four years. The purpose of the tax cuts is to stimulate an economy that has never fully recovered from the recession which occurred several years ago. Economists predict real GDP growth of 3% this year, which seems respectable until you compare it to rates of 4-5% which Australia perennially grew at in the late 1990’s. Most of the tax cuts will take the form of a drop in personal income taxes, although retirees and businesses will also receive some of the surplus. Economists believe the tax cuts will be effective in stimulating the economy. However, not everyone is satisfied. The Financial Times reports:

“There is a lot in this budget that deserves a tick but it is also a budget of missed opportunities,” said Peter Hendy of the Australian Chamber of Commerce and Industry.

Read More: Australia cuts taxes in post-election budget

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Posted by Adam Kritzer | in Major Currencies | No Comments »

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