Treasurer Scott Morrison promises tax cuts for people earning under $87,000 a year in Federal Budget

THE Treasurer says mooted tax cuts in the Federal Budget are aimed at earners who “think they haven’t felt” any benefit from the growing economy yet.

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SCOTT Morrison hopes his tax cuts will help all Australians feel like they are reaping the rewards of the country’s growing economy.

Tomorrow’s Federal Budget will detail the Turnbull Government’s tax relief plan, which will target low- and middle-income earners.

Treasurer Scott Morrison

While the Treasurer warned the public not to expect “mammoth” tax cuts, he believes the plan will be immediately felt in the pay packets of people earning under $87,000 a year.

“This Budget is very much about connecting people with the benefits of a stronger economy,” he told The Advertiser.

“There are many people in that (low to middle income) zone that think ‘I haven’t felt it (the benefits) yet’.”

Mr Morrison also confirmed that the Budget would not address mooted changes to the goods and services tax.

He said the Productivity Commission was due to hand down its final report on changing how the GST was split up between states later this month and the Government would consider its response later this year.

“The budget won’t be addressing that. There’s a lot more work to do on that over the course of this year,” Mr Morrison said.

But the Budget does include measures to address the arguably unfair amounts handed to Western Australia and the Northern Territory.

Mr Morrison said the Government had flagged its plan to deliver tax relief for low to middle-income earners months ago because they had been doing it tough for some time without a decent pay rise.

In what will most likely be the Coalition’s last budget before Australians return to the polls, Mr Morrison will argue that the Government has a plan to reduce everyone’s tax burden — including business — while Labor wants to slug high income earners with an “envy tax”.

The Government has already scrapped a plan to increase the Medicare levy from 2 per cent to 2.5 per cent for all taxpayers to fund the National Disability Insurance Scheme, ensuring Australians feel the full benefit of income tax cuts.

A stack of 2018-19 Budget papers is seen at Canprint in Canberra on Sunday. Picture: AAP / Lukas Coch

As well as reducing the income tax rate, the Budget is set to lay out a plan to reduce thresholds in a bid to prevent bracket creep.

A budget surplus has been forecast by mid-2021, which would be the first since before the 2008-2009 Global Financial Crisis.

Opposition finance spokesman Chris Bowen said he wanted to see the tax system improved and made fairer.

“We also want to see budget responsibility. We will test the government’s policies against those two yardsticks,” he told the ABC.