The possibility that the Morrison government will roll over the low and middle income tax offset for a third time at an $8 billion cost to the 2022 budget is about more than the politics of a federal election year and would be another sign of Australia’s broken tax system. The baking in of politicised anomalies and complexities such as LMITO underlines the lack of a genuine plan on both sides of politics for incentive-sharpening structural tax reform based on sound taxation principles.

The supposed temporary LMITO is an end-of-financial year rebate paid to people earning up to about $90,000. It was meant to be abolished once Treasurer Josh Frydenberg’s admirable stage-two flattening of the personal income tax scales came into effect and delivered the same tax cut as the means-tested offset.