Malcolm Turnbull to rush tax cuts in bid to survive

BILLIONS of dollars in crucial income tax cuts would be rushed forward to this year and widened to help more households, under a plan for political survival being formulated by Turnbull Government tacticians.

Prime Minister Malcolm Turnbull. Picture: AAP Image/Yuri Gripas

BILLIONS of dollars in crucial income tax cuts would be rushed forward to this year and widened to help more households, under a plan for political survival being formulated by Turnbull Government tacticians.

A Budget windfall of up to $12 billion from a surge in commodity prices has sparked a top-level push within the Government to reward households with a more meaningful tax cut than ­already planned.

While tax cuts had been flagged by Malcolm Turnbull and Treasurer Scott Morrison, the initial plan was to target middle-income households when the Budget could afford them, suggesting they might not flow for another two years – after the next election.

But behind closed doors, a debate was being held to make the tax cuts wider and bring them on sooner, especially with most households to pay a higher Medicare levy to fund the National Disability Insurance Scheme.

Ready to shake off the Barnaby blues, the Government remains under siege and more aware than ever that it needs to have a bumper Budget. Highly placed sources argued that reducing income taxes, coupled with business tax cuts – which the Government is convinced will spark pay increases – would be a potent weapon in defeating a populist Bill Shorten.

However, The Courier-Mail has been told some Cabinet ministers believe the mining royalties should be banked to help pay down debt quicker.

The Budget is currently forecast to be back in surplus in 2020/21. Personal income tax proponents say paying down debt is not a strong enough policy platform to take to the next election, which could be as early as this year.

Personal income taxes are costly and could come at the expense of infrastructure projects that the Government also wants to bankroll in the May Budget.

Finance Minister Mathias Cormann did not rule out the proposition yesterday.

“The Government is committed to reducing the business tax rate for all businesses to 25 per cent,” Senator Cormann, the Acting Prime Minister, told The Courier-Mail.

“The Government is also committed to delivering personal income tax cuts.”