Labor’s recalibration of the $21 billion-a-year stage three income tax cuts could encourage lower-income people to work more hours, but make negative gearing more attractive for high-income earners.
Market economists expect the changes to add slightly to inflation pressures facing the Reserve Bank of Australia because low-income earners will spend more of the tax cut than high-income earners.
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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 election. He joined the Financial Review in 2008 from Treasury. Connect with John on Twitter. Email John at jkehoe@afr.com
