Property investors have gone on strike, and who can blame them?

The reaction to the Budget has ignited anger about accumulated tax increases, which result in those in the top tax bracket (now including those earning only 50 per cent above average weekly earnings) paying 47 per cent at the margin in income tax. Just 15 per cent of Australians have an annual salary of $120,000 or more but these account for 68 per cent of the net income tax collected by the ATO. The top 3 per cent of earners pay 29 per cent of all net tax. Increasingly, a minority of hard workers are paying for an increasing number paying no net tax, and watch in disgust as their hard-earned money gets wasted on projects like the NDIS, Snowy 2, the white-elephantine Inland Rail etc.

Our federal politicians enjoy a lot of tax-free perks (travelling and other allowances, generous lowly taxed superannuation etc) and spend taxpayers money like there is no tomorrow. Meanwhile our hardest workers are taxed to the hilt.

Since the Budget, I have sensed increasing anger, especially amongst small business owners and those working long hours. The only thing saving the government from a big backlash in the polls is the extent of division in the Opposition, especially in the Liberal Party. This will not go on forever. I think further backflips by Labor are likely but the damage to confidence that has already happened will be hard to reverse.