FED: Tax cuts better than 'one-off sugar hit': Turnbull

AAP General News (Australia)
12-08-2008
FED: Tax cuts better than 'one-off sugar hit': Turnbull

CANBERRA, Dec 8 AAP - Tax cuts rather than a "one-off sugar hit" would have a greater
impact on the economy, federal Opposition Leader Malcolm Turnbull says.

The government started to roll out $8.7 billion worth of one-off payments to pensioners,
carers and low-income families on Monday in an attempt to stimulate an economy struck
by the global financial crisis.

Prime Minister Kevin Rudd has urged people to spend the money in the run-up to Christmas.

Mr Turnbull said any impact will be temporary, adding that while a similar program
in the United States in the middle of the year saw household incomes spike, expenditure
didn't go up by anything like the same amount.

"In a climate like this people are very much inclined to save one-off payments like
this," Mr Turnbull told the Fairfax Radio Network.

He said everyone should assess their own circumstances and deal with the funds as wisely
and prudently as they can.

"This is an economic equivalent of a one-off sugar hit," he said.

"If you want a more effective fiscal stimulus, tax cuts, across the board tax cuts,
particularly targeted at lower and middle-income earners, are going to have a greater
impact.

"People will see them as being permanent, they'll seem them as encouraging work, to
invest, to hire people and so forth."

AAP cb/kms/tnf

KEYWORD: STIMULUS TURNBULL

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