Federal Budget 2018: Treasurer Scott Morrison says no ‘mammoth tax cuts’

TREASURER Scott Morrison has issued a pre-Budget warning as the Government flags tax breaks would not just be coming for lower and middle income Australians, but higher earners as well.

AUSTRALIANS should not expect “mammoth tax cuts” on Tuesday, Treasurer Scott Morrison has warned going into the Federal budget.

The Government also flagged tax breaks would not just be coming for lower and middle income Australians, but the higher earners as well – but that they will have to wait longer for them.

It comes as Finance Minister Mathias Cormann indicates the big spending announcements by the government are going to be offset through cuts in other areas.

Mr Morrison, in one of his last pre-Budget pitches, played down the size of the promised tax cuts to be delivered on Tuesday.

“We will only do those things that are affordable and responsible,” he told the Nine Network.

“I’m not going to pretend that these are going to be mammoth tax cuts, that would be irresponsible.

“They will be what’s affordable, they will be real and they will be within what the government can afford.”

Treasurer Scott Morrison before an interview with Nine News on Sunday. Picture: Kym Smith

He said money for the cuts, infrastructure spending and bringing the budget back into surplus had been helped by an increased number of people in work and companies paying more tax as the economy turns around.

“More people in work and companies paying more tax as they turn fortunes around. What we’ve seen is more people getting back into jobs,” he said.

“When you’ve got people who are no longer on welfare payments and are actually in jobs paying taxes that’s what happens.”

Mr Morrison defended the growing debt, as government borrowings are already above $530 billion and continue to grow.

“We’ve been bringing the deficit down year after year after year. The debt growth when we came to office has reduced by two thirds.

“You cannot reduce the debt if you’re still in deficit.”

Meanwhile, Finance Minister Mathias Cormann indicated there would be tax cuts in the budget for higher wage earners, but it would not be an immediate relief.

“We’re making judgments on what can sensibly be afforded and in what sort of progress. In terms of the overall approach it will be a phased approach,” he told Sky News.

“We will be prioritising low and middle income earners in the first instance, but there will be a phased approach moving forward.

“We do recognise high income earners are carrying a significant tax burden of the economy today and we do need to ensure that all Australians have the right incentive and are encouraged to work harder.”

But Opposition treasury spokesman Chris Bowen said the government was relying on optimistic forecasts and hoping the international economy did turn down to underpin its budget.

“When Scott Morrison talks about a tax cap or a handbrake on tax, what he is saying is he is happy for future generations to pay down the debt,” he told the ABC.

“We need strong surpluses. We need a government prepared to take the tough decisions to return the budget to surplus and healthy, sustainable, ongoing surpluses not razor-thin surpluses.”

Originally published as Federal Budget 2018: Treasurer Scott Morrison says no ‘mammoth tax cuts’