Tax cuts a ‘poison pill’: Deloitte Access Economics warns Turnbull Government over economic hit
ONE of the country’s leading economists has warned the government against offering tax cuts, while a new report reveals Tony Abbott’s horror 2014 Budget could have been even tougher.
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TAX cuts in a Turnbull Government “battlers Budget” would be a “poison pill” for Australia’s economy, according to a leading economic analyst.
Deloitte Access Economics has warned the federal government against implementing the personal income tax cuts flagged by Prime Minister Malcolm Turnbull and Treasurer Scott Morrison in 2018 in its quarterly business outlook released today.
It comes amid new revelations that Tony Abbott’s “razor gang” considered banning anyone under age 30 from receiving welfare payments in the former prime minister’s harsh 2014 budget.
Deloitte economist Chris Richardson has predicted a year of strong jobs growth off the back of the strongest global growth in years but warned the government should not try to win back dissatisfied voters by introducing tax cuts now.
“Here we go again — a government lagging in the polls looks set to leave behind a poison pill,” he says in the report.
“Labor did it with spending in 2013, the Coalition with tax cuts in 2007, and now 2018 looms as a ‘battlers Budget’ of tax cuts.
“That undermines Budget repair.”
Mr Richardson said continued budget repair measures would help protect Australia’s prosperity against the next recession.
He said until politicians stopped “mollycoddling” their bases, budget repair looked unlikely.
Meanwhile, the ABC reports Mr Abbott, Joe Hockey and Finance Minister Mathias Cormann, who made up the powerful expenditure review committee for the 2014 budget, considered a radical crackdown on young “job snobs”, which would have saved the government $9 billion under the harshest form of the proposal.
The committee considered potentially cutting off welfare access for Australians aged under 30 entirely, cutting access to welfare for young people in areas with employment opportunities, and limiting welfare for young people with a work history.
Liberal MP Kevin Andrews, who was Social Services Minister at the time, reportedly raised “significant concerns” about the proposal in a letter to Mr Abbott, predicting the “fundamental change” to Australia’s social security net could have a backlash.
“Young people in financial hardship could experience homelessness, be driven to crime and other anti-social behaviour, family breakdown and possible criminal flow-on resulting from removing the social security safety net,” he reportedly wrote.
Originally published as Tax cuts a ‘poison pill’: Deloitte Access Economics warns Turnbull Government over economic hit