Alan Kohler

Haven't you got one?

No, no.

Oh, James, we've got to get you one or two.

You can give one to your wife.

She'll love to wear it.

Yeah, yeah.

Nick says, Alan has pointed out the political flaws with indexing income tax rates to inflation, tax cuts by stealth, but what about the economic case against them?

It seems to me that the coalition's policy would be pro-cyclical, where periods of high inflation would have bigger tax cuts, returning greater amounts to people, fueling demand and inflation, while the opposite will be true when inflation is low.

This will undo the counter-cyclical impact of bracket creep.

That's true, isn't it?

Yeah.

Well, I think he might be.

I do think, I mean, I'm not sure I said this, but I think that if you're going to get rid of bracket creep with indexation of tax scales, fair enough, but you've got to find some other way of increasing or getting more, you know, having a growth tax.

So you simply have to, in my view...

offset it by increasing GST to something close to the OECD average of 20% or have a wealth tax of some sort, which a lot of companies do.

I mean, countries do.

So because, you know, I just don't think it's – even Angus Taylor I don't think is capable of cutting spending to the extent necessary to deal with the end of bracket creep.

I just, you know –

I mean, he can talk all he likes about it, but I think that if you end bracket creep, you're going to end up with bigger deficits because there's no way they're going to be able to cut spending to the extent they think they can.

Yeah, yeah.