Treasury secretary Steven Kennedy last week argued it would be a bad idea to index income tax thresholds to inflation like other countries because it would add to inflation.
That bracket creep helps the budget’s automatic stabilisers restrain inflation by taking money out of people’s pockets is accurate – at least in isolation in the short term.
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John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s first election. He joined the Financial Review in 2008 from Treasury. Connect with John on Twitter. Email John at jkehoe@afr.com
