Tony Abbott is refusing to rule out a temporary tax increase for middle and high income earners to help pay down the budget deficit, despite a bitter backlash from his own colleagues, business groups, economists, Labor and the Greens.



The temporary tax, which would reportedly start with a 1% increase in the 37% tax rate that cuts in at earnings of $80,000 and 2% for the 45% rate that cuts in at $180,000, has angered and bewildered colleagues because it so clearly breaks the government’s election commitments.



Most of the Coalition MPs and senators criticising the plan have done so anonymously, describing it among other things as “electoral suicide” – but now one – conservative South Australian senator Cory Bernardi has put his opposition in print.



In his online newsletter “Your weekly dose of common sense”, Bernardi refers to the “mooted new income tax levy to help repair the national budget” saying he has no inside knowledge of the plan, but had “always believed that a government should lower taxes – not increase them”.



He describes increasing taxes as a “folly” and says “a conservative government should be taking less tax from people and expecting them to be more self-reliant. Taking more of their weekly wage will only act as a disincentive or make it even more unaffordable for people to do the right thing.”



“I know the country has been left with a significant debt burden – a circumstance that I have repeatedly warned about over the past six years. But reducing that level of debt demands we grow the size of the economy and shrink the size of government.



“Growing an economy needs private investment and spending to create jobs and stimulate demand. For individuals and companies to do that, they need more of their own money left in their pocket, not less.”



The prime minister was again asked about the plan on Tuesday and neither confirmed it nor ruled it out.



He said he would not provide a “running commentary” on the budget, but added “we will fix the problem and we will do it in ways that are fair”.



“I don’t want low income earners or recipients of government services to be saying to me 'look what’s happening to our services, prime minister’, and for someone in my position to be getting off scot-free. Everyone has to do his or her bit…we were elected to solve a problem and solve it we will,’’ he said.



"I think if there was a permanent increase in taxation that would certainly be inconsistent with the sort of things that were said before the election.



"We want taxes going down not going up, but when you're in a difficult position, sometimes there needs to be some short-term pain for some long-term gain."



The idea of a temporary levy has also been criticised by the Australian Industry group and the Business Council of Australia.

