Abolish lucrative tax breaks to restore budget discipline, CEDA warns ahead of election

An independent economic think tank is urging the federal government to do the politically unthinkable and rein in what it sees as unsustainable tax breaks just out from the May election.

The Committee for Economic Development of Australia (CEDA) says tough decisions need to be made about controversial refundable franking credits, work related expenses and capital gains tax to ensure the anticipated budget surplus is long term instead of a one off. 

In the case of the tax credits that Labor wants to abolish, CEDA says the cost to the budget has ballooned from $550 million when the break was first introduced to $5 billion dollars today, mostly to individuals with big investment portfolios. 

CEDA chief executive Melinda Cilento speaks with ABC's Peter Ryan.