Tax changes not inflationary for four reasons, says Treasury

Tom McIlroy and John Kehoe

Jan 25, 2024 – 9.12am

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Treasurer Jim Chalmers says Reserve Bank governor Michele Bullock told the government its controversial changes to the stage three tax cut package won’t add to inflation, conceding bureaucrats worked on the redesign for weeks.

Amid intense criticism over Labor’s broken promise on the tax cuts, due to come into effect from July 1, Dr Chalmers said the government had changed its position to better assist households hit by cost-of-living pressure.

Tom McIlroy is the Financial Review’s Canberra bureau chief based in the press gallery at Parliament House. He was previously the AFR’s political correspondent.

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.