As Labor's Victorian Premier Steve Bracks pointed out, the States are due to get the GST revenue. If Federal Labor gives it away as an electoral gambit, the States will need to be compensated or impose cuts on schools, hospitals, police and so on. Earlier in the week Howard found himself on dangerous ground after suggesting that he was contemplating a new round of tax cuts. Commentators took it for granted that he would announce big cuts in the May Budget and deliver them before the election. With luck, there might be a spare billion dollars kicking around in the May Budget.
Bigger cuts are possible if fat surpluses genuinely exist in future years.
It will be hard to convince voters that promised tax cuts in future years will actually materialise if the economy remains sluggish and the Budget goes into deficit. And that's before anything is given to pensioners. For someone who hates taking a risk, Beazley is gambling that he can get away with offering nothing on the income-tax front. According to Beazley, rolling back the GST will be all he offers by way of tax cuts. Unless he confines this to tampons and caravan parks, however, he won't have any spare money for education, health and other issues which opinion polls say voters regard as a priority.