Sharri Markson: Budget’s a blow to Shorten’s end game
MALCOLM Turnbull is back in the ring. The Prime Minister and Treasurer Scott Morrison have managed to outmanoeuvre Labor with a Budget that will prove popular, thanks to generous tax-breaks, while economically responsible in its early return to surplus and spending restraint.
Opinion
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MALCOLM Turnbull is back in the ring.
Off the back of the last night’s Federal Budget, the Turnbull Government has a fighting chance of winning the next election.
The Prime Minister and Treasurer Scott Morrison have managed to outmanoeuvre Labor with a Budget that will prove popular, thanks to generous tax-breaks, while economically responsible in its early return to surplus and spending restraint.
Abolishing an entire tax bracket of between what is currently $87,000 and $180,000 to see more workers paying a lower 32.5 per cent tax rate is bold reform. It’s innovative.
ScoMo’s cutting edge tax reform ushers in surplus
Giving tax relief to the tune of $140 billion over 10 years to low and middle-income Australians is entirely welcome.
The lump-sum payment more than 10 million low and middle income Australians will receive when lodging their tax return next year, at the end of the 2018-19 financial year, will also likely prove stimulatory to the economy.
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The $530 will fund a washing machine or new television — or could be put towards the rising cost of electricity, paying the car rego or school fees.
Unfortunately, the tax cuts are possible because of vastly improved tax revenue and better economic conditions rather than any real fiscal discipline or major budget repair.
As early as today, the tax reform package, including both the tax breaks and the restructuring of the tax brackets, will be introduced to the House of Representatives.
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The move will wedge Bill Shorten. He will be seen as obstructionist if he confects a reason to deprive Australians of tax relief flowing through at the end of the 2018-19 financial year. Morrison could have introduced the tax cuts earlier to act as a pre-election sweetener, but he has given equal priority to an early return to surplus, scheduled for 2019-20.
Provided the tax reform package passes the Parliament, the government will go to the polls with legislated tax cuts and a credible path to surplus.
It will be a tough economic narrative for Labor to beat.