No time for tax cuts when fighting inflation is so vital
Tue Feb 12 2008
The Sydney Morning Herald --- Page: 18 : 12 February 2008 Original article by Malcolm Maiden
LexisNexis Summary
The Australian Treasurer, Wayne Swan, should be concerned by inflation comments from the Reserve Bank of Australia (RBA) in early 2008. Despite its December 2007 prediction that inflation would return to three per cent by December 2008, the RBA has adjusted its forecast to up to 3.75 per cent in 2008, and fears it will stay above three per cent until the end of 2009. The RBA is convinced that tax cuts are feeding inflation growth, although it acknowledges the role of rising employment and wage increases also. One proposal that may be considered is Nicholas Gruen's: that tax cuts should be redirected into superannuation. Ordinarily, the Australian Labor Party would suffer electorally from back-flipping on tax cuts, but 2008 is the first year of its term, so it could prove beneficial.
