Australia launches economy-saving tax-cuts

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Larger-than-expected tax cuts were announced Tuesday by the centre-right coalition government in Australia. The cuts are meant to stop an economic slowdown that will probably have the nation showing its lowest growth rate in over ten years. The Treasury cut its prediction of growth in this fiscal year to 2 percent, where six months ago it had predicted a 3 percent growth rate for the year ending in June. It also announced a new forecast growth rate for fiscal year 2005-06 of 3 percent. This is much lower than the 4 percent and higher growth rate per year achieved in the 1990s. The government is employing a budget surplus to promise Australians A$21 billion ($16.8 billion) in cuts in personal income taxes over four years. The government will also abolish a pension contribution surcharge tax outright for high-bracket earners to attempt to stem the economic slowdown. Big business was not happy that it did not receive a larger share of the cuts, as corporate taxes are scheduled to fall by only A$1.8 billion.