Tax Relief is what we really need

It seems federal governments stimulus packages are really not working. As Peter Costello said last night on Q and A that this whole global economic meltdown started because some people were spending a lot of money which they didn’t really own and the Rudd government is trying to fix this problem by actually doing the same thing. Government handed billions in payments last year which had little impact on the economy and it wants to hand out more money now. Almost on a daily basis we are hearing news about people loosing jobs and companies moving offshore. I’ve lived in Australia for about 7 years and in that whole time I only heard news about boom and more jobs. I agree we are in a huge financial crisis but I believe the present government is making it worse by actually handing out free cash. Government is handing out this cash believing that people will spend it thereby creating more work but people are so scared of times ahead that almost everyone will and is trying to save it for rainy days. This is why these packages won’t work.

Instead of free cash, the government should provide tax relief to both the business sector and families. Tax relief is more likely to help in stimulating the economy as it will give an incentive to work more. More work with less tax = More money in everyone’s pocket.

Especially for the small business sector, tax relief will help long way. It will keep the cash flow going and this is what businesses really need.

Finally, a couple of days ago some good news came in. Small businesses struggling with the economic crisis will get tax relief through a 20 per cent reduction in their pay-as-you-go (PAYG) obligations. This tax relief is just one initiative; the government must definitely reduce the corporate tax rates and cut many other different kinds of taxes.

No stimulus package will take us anywhere. All we need is three things

1.) tax relief

2.) tax relief and

3.) tax relief