The Liberal Democratic Party is a small moderate libertarian Australian political party founded in 2001. The party is registered in the Australian Capital Territory, but it is not yet registered federally.
Philosophy
The party generally adheres to libertarian principles, with a laissez-faire approach to economics and socially liberal policies on civil liberties.
Policies
Some LDP policies include:
- Legalisation of marijuana;
- Support of shooters rights;
- Opposition to the Kyoto protocol;
- Support of free trade;
- Support of gay marriage; and
- Support of smokers rights.
The party claims to defend the individual rights of unfashionable minorities such as shooters and smokers.
Economic Reform
Much has been said about the need for tax and welfare reform in Australia, but the tyranny of the status quo and self-imposed limitations such as 'budget neutrality' and no 'person-worse-off' relegate any usual reform proposal to failure. Consequently, the LDP does not argue for incremental reform. Instead it offers a new template from which to consider tax and welfare issues, a tax revolution: Reform 30/30.
Reform 30/30 includes a tax-free threshold of $30,000 and a flat income tax of 30%, with no deductions. All income taxes (company, Capital Gains Tax [CGT], Pay As You Go [PAYG], Fringe Benefits Tax [FBT]) would be equal at 30%, and the Medicare levy removed.
The tax-free threshold (TFT) would be increased to $30,000 per person and all tax expenditures (tax deductions, offsets, and so on) would be removed.
The current welfare system would be replaced by a sliding scale of payments (called a Negative Income Tax or NIT) that phased out at 30% and finished at an income of $30,000.
For example, if you earned $0, you would receive 30% of $30,000 ($9000). If you earned $10,000, you would receive 30% of $20,000 ($6000). If you earn $25,000, you would receive 30% of $5000 ($1500). This would involve a cut in payments to the unemployed and an increase in payments to low-income earners.
One advantage of the NIT is that it removes the need for the minimum wage. Instead of legislating for higher wages, the NIT allows wages to stay at their market rate and instead supplements low incomes with an NIT payment. Removing the minimum wage would result in a significant increase in the number of jobs available.
The effective marginal tax rate (EMTR) is always 30%. The EMTR measures how much of an additional dollar earned goes to the government. Under the current system the EMTR is variable and high. One cause of high EMTRs for people on low-incomes is the overlap of paying income tax and losing welfare payments. This can lead to EMTRs of up to 80% on some of the poorest people in Australia and is called the "poverty trap", and is a major disincentive against getting a job.
The combination of lower unemployment payments, more jobs available and greater rewards for getting a job would lead to a significant increase in employment, and the social capital benefits that go with that (higher self-esteem, more opportunities, greater social participation). Absolute poverty would be reduced and economic growth would increase.
By having a flat tax at the same level as company tax, and removing all tax expenditures (except those necessary to retain the integrity of the income tax system), it would no longer be necessary to complete a tax return. Where the same person both pays income tax and receives welfare: under the LDP's proposals this would be abolished.
Some elements of Reform 30/30 will work to offset the lost revenue -- such as less unemployment, lower welfare payments, higher economic growth, less tax avoidance, the removal of middle-class welfare and lower administration costs. In addition, the removal of tax expenditures will save the government $30 billion and remove hundreds of inefficient distortions (which will in turn lead to higher economic growth).
Full details on this reform policy are contained in Reform 30/30: Rebuilding Australia's Tax and Welfare Systems by John Humphreys. http://www.cis.org.au/publications/policymonographs/pm70.pdf
History
The LDP was founded by John Humphreys in 2001 and was registered in the ACT later that year. They contested their first election for the ACT legislative assembly in October 2001, running candidates in all seats and receiving 1% of the vote (around 2000 votes).
In the 2004 ACT election they again ran candidates in all seats and received 1.3% of the vote.
They did not run candidates in the federal elections of 2004.
In 2005 John Humphreys was replaced by David McAlary as Party President.
The party is on track to achieve federal registration with the Australian Electoral Commission by January 7, 2007, which is also the date of its first National Conference.
External links
- Liberal Democratic Party of Australia official site
- LDP blog
- http://www.cis.org.au/publications/policymonographs/pm70.pdf