Tax cuts that heavily favour the rich take effect from Wednesday, but the State's leading industry group says they are not enough and wants the rate for high income earners slashed from 45¢ to 30¢ in the dollar to help fight the economic downturn and encourage more people into the workforce.
The cuts, largely mimicking a plan formulated by the Howard government in 2007, will increase weekly pay by $41 for people earning more than $180,000 a year.
People earning $100,000 a year will get an extra $10.58 a week, while workers on $60,000 will receive just $2.88.
A spokesman for the WA Chamber of Commerce and Industry confirmed yesterday that its tax reform position had not changed. It is advocating more cuts as part of its submission to the Federal Government's Henry Tax Review.
The chamber has in the past argued that tax cuts are a more efficient way of stimulating the economy than cash handouts and that there are still staff shortages in some WA industries that would be alleviated if "discouraged workers" had to pay less tax.
The Federal Government's cuts come as a study at the weekend found that they would do little to stimulate the economy and represent a wasted opportunity to spend more on health and education.
The paper, by the Left-leaning Australia Institute, said people earning less than $34,000 a year would get nothing - although the figures did not factor in the impact of a boost to the low-income tax offset in 2009-10.
The study found that less than 2 per cent of Australia's 11.8 million taxpayers earned more than $180,000 a year, the amount necessary to get the maximum $41 cut, while almost half earned less than $34,000 and would not benefit.
Institute senior research fellow David Richardson said Wednesday's tax cuts had received little scrutiny since the last election, although the changes were unfair and "outrageously favour the rich".
Mr Richardson said tax cuts for the wealthy tended to do little to stimulate the economy, unlike financial assistance for people on lower incomes, who tended to spend rather than save extra cash.
