Proposed 2008-2009 tax cuts - Are they fair?

From News Limited media reports, here are the expected tax cuts (on average) for next financial year:

- Workers earning $15,000 or less will have their tax rates cut by 75 per cent, to just $150 a year
- Those earning $35,000 a year will get a tax cut of $20.19 a week, equivalent to 3 per cent of their salary
- Those on an average wage of $55,000 are in line for an extra $15.86 a week; and those on $60,000, $11.53.
- At the higher end, those on $150,000 or more a year will get the equivalent to just 0.7% of their pay or about $20 a week.

Australia's lowest-paid workers will be the big winners when $31 billion in federal tax cuts come into effect on July 1. I guess this confirms that the Labour party is back to its roots in helping the low and middle class income families per their election promises. Treasurer Wayne Swan said the previous federal government had turned its back on battlers - "For too long under the Liberal Party, low and middle income earners missed out on genuine relief while the bulk of tax cuts flowed to the top end... Out there in the suburbs and towns hardworking Australians are doing the right thing by their families and their country and we will reward them for their hard work," he said.

Given Australia's economic boom for the last few years, I am surprised the tax cuts were not more broad based. I imagine a number of people in Australia's metro areas are earning more than $35,000 a year , so the tax cuts for them will just be eaten by inflation and the increased cost of living. The government should really focus on improving Australia's education, health and infrastructure systems to keep pace with the rest of the world. What's your opinion?

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Photo courtesy Bailey & Muppet