Australia Votes 2007: Treasurer says Labor tax plan contains error

Australian Treasurer, Peter Costello has attacked the opposition Labor party's tax cuts saying they contain a "basic error". The error Mr Costello claims could cost 45 percent of Australians an additional AU$600 a year in tax.

Speaking at a joint press conference with the Prime Minister, Mr Costello accused Labor of failing to increase tax thresholds. "In order to meet the goal of having 45 per cent of taxpayers on a 15 cent threshold or less you have to keep lifting those thresholds ... and they made a basic error," said the Treasurer.

"They understood you had to keep lifting the low income tax offset because they adopted that but they made a fundamental and basic error in not lifting those other thresholds."

Mr Costello said Mr Rudd has ignored the problem by admitting the error and adjusting his tax thresholds. "He refused to admit the error and as a consequence 45 per cent of Australians will be worse off," he said.

Mr Costello accused Mr Rudd of using his announcement of an increased childcare rebate to distract voters from errors in his tax policy. "He went on to announce changes to the childcare rebate to draw attention away from his blunder," the treasurer said.

Mr Costello accused Labor of copying it's policy and says that the parts the government didn't release are those on which Labor made errors.

Labor has dismissed the claims, saying that voters only needed to look at Mr Costello's history on tax.

He said Mr Costello is desperately trying to kick the tax debate along, but should have a good look at his own record.

"It's time Mr Costello got real about tax reform," said Mr Rudd.

"If he was a reforming Treasurer after 11 years he would have taken a meat axe to rates, what has he always done? Fiddle faddled, and fiddle faddled around on the whole question of thresholds, that's all he's ever done."