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Tax rises for Iraq mission on the table

Finance Minister Mathias Cormann says he will not rule out raising taxes to help pay for Australia’s mission in Iraq and a recent funding boost to national security agencies.

Since handing down its budget in May, the government has given national security agencies an extra $630 million over four years.

The government has also estimated that the military deployment to the Middle East will cost about $500 million per year.

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The government’s failure to win Senate support for billions of dollars in budget measures has it looking for new savings.

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Finance Minister Mathias Cormann. Photo: AAP

Senator Cormann told Sky News he is looking “right across the board” for possible savings and would not rule out increased taxes or further cuts to the foreign aid budget.

“I’m not going to rule anything in or out. Our commitment is to get government spending back under control, to get back onto our trajectory as a result of our decisions to reduce spending,” he said.

“We are looking right across the board for ways and means to deal with additional expenditure and any impact on savings of the slower passage of measures.”

The E-7A Wedgetail aircraft at RAAF Base Williamtown has joined an international mission against Islamic State in Iraq.

The E-7A Wedgetail aircraft at RAAF Base Williamtown joins the mission against Islamic State.

But the Federal Opposition said the government needs to get its act together on economic policy.

Shadow Assistant Treasurer Andrew Leigh said the government should take its whole budget back to the drawing board.

“Now we’ve seen … Mathias Cormann saying there are further cuts to come, cuts across the board, and not ruling out further new taxes,” he said.

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Iraqi Shiite militia fighters ride in a truck after pushing back Islamic State (IS) militants. Photo: Getty

“This government needs to get its act together on economic policy because it’s vital that we begin to put in place the investments that’ll underpin future prosperity.”

We asked for your thoughts about Mr Cormann’s refusal to rule out tax increases and this is what you said.

Federal Treasurer Joe Hockey said last week the government had “no choice” but to look for new savings.

He said investment in the Middle East military campaign was “money well spent” but meant finding new sources of funding.

Mr Hockey said cuts will be revealed in December in the mid-year economic and fiscal outlook (MYEFO) budget update.

On Thursday, Foreign Minister Julie Bishop made it clear to her senior colleagues she will fight any attempt to cut the foreign aid budget.

The government faces difficulty convincing the Senate to pass controversial budget measures including the $7 GP co-payment, deregulation of university fees and changes to the dole and age pension.

This week, Labor agreed to support some proposed welfare changes – handing the government $2.7 billion in savings.

Labor says the majority of the government’s budget measures are unfair and target the poor unnecessarily.

Senator Cormann said the government was prepared to take controversial budget measures to the next election when Labor will have to propose its own savings plan.

—ABC, AAP

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