rn Christian Kerr writes:rn
rn rn
rnrnSMH economics commentator Ross Gittins isrneven more entertaining than usual as he talks tax this morning. “One man’s givernis another man’s take” rnhe writes, looking at the various interpretations of the OECD report TaxingrnWages from last week.

He’s beingrnhelped along by the other broadsheets today. The Australian tells us howrn“sparing mining export prices andrnsigns of a resurgence in the economy are likely to give Treasurer PeterrnCostello a record budget surplus of up to $16 billion, increasing the scope for substantial tax cuts”.

ThernAge,rnhowever, says the “scope for tax cuts in next month’s budget will bernlimited by a large drop in the size of the surplus next year asrnthe global commodity boom unwinds and company profits slow, TreasurerrnPeter Costellornhas warned”. One man’s give is another man’s take. Except perhapsrnGittins shouldn’t have used gender specific language.

Federal Sex Discrimination Commissioner Pru Goward is urging changes tornthe tax system to help families where both parents work part-time, the ABCrnreports.rnGoward says under the present scheme, stay-at-home parents are entitled tornadvantages from family tax benefit B.

“If family tax benefit B were changed from being one full time and onernnot in the work force, to one full-time equivalent parent, that would make thatrnfamily entitled to it,” she says. “Because then I think you would see familiesrnwhere the man wasn’t working 40, 50, 60 hours a week to enable her to stay homernto get family tax benefit B, and it would be possible for them both to keep theirrntoe-hold in the work force.”

That’s an interesting follow uprnto yesterday’s Australian report on unpublished OECD research showingrnAustralian mothers are less likely to work than in almost any otherrndeveloped country because of generous family tax benefits and limitedrnchildcarernoptions.

And wernshouldn’t forget the comments shadow finance minister Lindsay Tanner made to arnCentre for Independent Studies policy forum a few weeks ago: “In 2003-04, Family Tax Benefit B was paid to 38,500 familiesrnearning over $100,000 per annum, and 76 families earning over $1 million perrnannum.”

So muchrnabout who works, who can work and who has an incentive to work goes back tornthat tax/welfare/family knot politicians only seem prepared to pick at.

Gittinsrnends up talking about family tax benefits. “John Howard protests there’s norneasy answer to this problem, and he’s right. But it’s the greatest singlernweakness in our tax system, and if the budget makes no attempt to reduce itrnthis will be a sign of a Government that’s stopped trying.”

Is it toorncynical to suggest that instead all we’ll see in the Budget is an increase inrnthe income level where the 42 cents in the dollar tax rate cuts in so that morernpeople are on 30%?