Treasurer talks down prospect of tax cuts
IF YOU were hoping for tax relief in the Budget, don’t hold your breath, because the Treasurer has poured cold water on the prospect.
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JUST a few months ago the government vowed to fight bracket creep, the scourge of the pay-as-you-earn (PAYE) class, but suddenly the battle doesn’t seem so important.
It has effectively abandoned any substantial measures to rescue workers from being pushed into higher tax brackets, even though the buying power of their pay packets is shrinking.
Treasurer Scott Morrison has made it clear there will not be any significant income tax cuts in the coming Budget because stronger economic growth was needed to pay for them.
Shadow treasurer Chris Bowen today claimed this was the latest backflip by Mr Morrison, who on January 24 said: “I’m quite passionate about it [bracket creep], because I think that’s one of the things that is holding the Australian economy back.”
And in February he said: “The goal is to ensure that those 300,000 — that the average wage earner in this country doesn’t move into the second highest tax bracket.”
Mr Bowen said today: “On every position Scott Morrison has taken on tax over the last 12 months he has either been rolled or has backflipped.
“Mr Morrison declared dealing with bracket creep the great moral challenge of our time as late as January this year, and since then, every day, the Treasurer has walked away from major tax reform including now, delivering personal income tax cuts.”
Finance Minister Mathias Corman recently downplayed income tax problems because wage growth has been stunted at recession-period levels, and inflation had been under control.
However, the government had raised the prospect of modest tax cuts to help household finances.
Yesterday the Treasurer told a conference income tax relief could not be paid for by cutting spending.
“The best way to drive income tax cuts ultimately, is off growth. So our focus is very much on, ‘Let’s drive growth’,” Mr Morrison said.
Labor is expected to directly attack Mr Morrison today with a list of what the Opposition says are tax policy fumbles.
These include:
● Changes to the GST promoted in January but then vetoed by Prime Minister Malcolm Turnbull
● Mr Morrison referred to “excesses” in the negative gearing scheme but has declined to identify them
● The Treasurer attacked Labor proposals for a rise in tobacco excise but is now considering the erasure himself
● Mr Morrison criticised Labor plans to reduce tax concessions for wealthy superannuation accounts, but is looking at a similar proposal himself.
Originally published as Treasurer talks down prospect of tax cuts
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