Hard-working Aussies `deserve tax break`

Treasurer Wayne Swan wants harder-working Australians to be given a tax break.
Unions and business agree.
With tax reform high on the federal government's agenda, Mr Swan said workers who
put in overtime deserved a softer tax burden.
"So that when people work a few extra hours, when they're on average incomes, they
don't get hit for six," he told ABC Radio on Friday.
The treasurer also stressed the need for "fairness and incentive" in the tax system.
Prime Minister Kevin Rudd said that as the population aged, workers needed
incentives to work longer "if they want to work longer".
The ACTU weighed in, calling for low-paid and part-time workers to be spared tax
penalties and welfare cuts the longer they stayed at work.
"This acts to discourage low and middle income working people from seeking work or
increasing hours," assistant secretary Tim Lyons told AAP in a statement.
"Reforms to the tax system should focus on fairness for working people, increasing
participation and productivity, and maintaining a robust revenue base."
The Australian Chamber of Commerce and Industry (ACCI) also believes existing tax
arrangements are discouraging people from working harder.
"In so far as there are various thresholds ... it's a disincentive," economics
policy director Greg Evans told AAP.
"By reducing personal income tax, it encourages people back to the workforce."
Treasury Secretary Ken Henry's long awaited tax review is not expected to be
released until the first quarter of 2010 but Dr Henry hinted on Thursday at the need
to reward older workers.
Asked about Dr Henry's suggestions, Mr Swan said the government had already given
retirees incentives to engage in part-time work.
"When we're talking about increasing productivity we're talking about working
smarter, not necessarily working longer," he told reporters in Brisbane.
Dr Henry is reportedly also pushing for a clawback of fringe benefits tax (FBT)
concessions.
Mr Swan said if there were any rorts in the FBT system then "of course they should
be eliminated".
The ACCI says releasing snippets of tax reform ideas is creating uncertainty among
business, and it wants the government to instead release the entire tax review now.
"These are major issues. They affect the investment climate of Australian business,"
Mr Evans said.